Don't risk your investment with a Property Inspection WaiverIf you are getting a loan for a home, your lender may give you the option to use a Property Inspection Waiver – or PIW – on your application. The PIW program, initiated by Fannie Mae in 2017, allows you to be approved for a mortgage without an appraisal at all. It's a newer concept, and some lenders love it. But what drove it, and what are the risks for you? 
How do PIWs work?Essentially, what your home is worth is established by your lender. They determine its value automatically on a computer, using a database from Fannie Mae rather than hiring a local appraiser to personally inspect the home you're getting ready to buy. So, rather than a hands-on evaluation, lenders rely on computer algorithms to sort through an array of previously collected data. Get your appraisal from Omni Appraisal Services today Get a quote nowWho is eligible for a Property Inspection Waiver?The program is limited right now, but it is progressively expanding to include more types of transactions. Your home needs to have entries in Fannie Mae's electronic database, so homes that have never been appraised are not eligible for a Property Inspection Waiver. Additionally, you're required to have an excellent credit score and high assets to be approved. Why is a Property Inspection Waiver used?The waiver omits appraisal charges, and it can considerably reduce closing time for buyers. Outwardly, this process sounds like a good deal — but there's a key point you will want to consider. With a PIW, your lender is NOT held responsible if the valuation turns out to be wrong. That's an added bonus for lenders, but offers zero protection to the buyer. What could happen if I agree to a Property Inspection Waiver?The information in Fannie Mae's database is pulled from previous appraisals completed by professional appraisers. it might be accurate to some extent, but it won't necessarily be an up-to-date assessment of the quality of a building that's regularly changing. Without a professional valuation of your home, recent improvements and/or damages could easily be missed by the system. Because of these shortcomings, you can imagine an instance where your property is priced too high by the system assessing it. If that happens, you could run into issues when it's time to sell. You could wind up settling for less than you paid, and you'll have no recourse against your lender when the money falls short. What's the bottom line?A definitive appraisal typically costs a few hundred dollars, but it can save you thousands in the long run. With a PIW, there's simply no guarantee you're getting an honest valuation of your most expensive asset. Omni Appraisal Services can help. Buying or refinancing a house is a big decision with grand consequences. You should know with certainty that you're receiving a fair deal, and working with a licensed appraiser is the safest way to go. Computers and algorithms have assumed a place in almost every area of modern life, but when it comes to measuring the value of your property, nothing is more precise than the careful assessment of a licensed professional you trust. |