Don't risk your investment with a Property Inspection WaiverIf you're getting a loan for a home, your lender might give you the option to use a Property Inspection Waiver (PIW) on your application. The PIW program, introduced by Fannie Mae in 2017, allows you to be approved for a mortgage without needing an appraisal. It's a relatively new concept, and some lenders love it. But what determined the change, and what risks are there for you? 
How do Property Inspection Waivers work?Basically, the task of deciding what your home is worth falls into the hands of your lender. They determine the value automatically on a computer, employing a database from Fannie Mae instead of hiring a local appraiser to inspect the property you're getting ready to buy. So, rather than a hands-on evaluation, lenders rely solely on computer processes to sift through a bank of previously collected information. Get your appraisal from H.M. Hoffman & Company today Get a quote todayWho can get a PIW?The program's currently limited, but it's progressively expanding to include more types of transactions. Your home has to have entries in Fannie Mae's electronic database, so homes that have never been appraised are not eligible for a PIW. What's more, you're required to have an excellent credit score and high assets for approval. Why do lenders use PIWs?The waiver removes appraisal charges, and it can considerably reduce closing time for buyers. Outwardly, this process seems like a good deal — but there's a crucial point you'll want to consider. With a PIW, your lender is NOT liable if the valuation winds up being wrong. That's a bonus for lenders, but terrible for the home buyer. Could anything go wrong?The information in Fannie Mae's database is derived from previous appraisal reports completed by professional appraisers. This data might be accurate to a degree, but it won't necessarily be a current evaluation of the exterior and interior quality in a building that's constantly changing. Without a professional appraisal of your home, new improvements, remodels, or damages can easily be neglected by the system. Because of these shortcomings, you can imagine a situation where your property is valued too high by the program evaluating it. If that happens, you could run into issues when it's time to list it for sale. You might not be able to receive what you paid for it, and you'll have no recourse against your lender when the money falls short. What's the bottom line?An accurate appraisal typically costs a few hundred dollars, but it could save you a substantial amount more in the future. With a Property Inspection Waiver, there's no guarantee that you're getting an honest valuation of a premium asset. H.M. Hoffman & Company can help. Buying or refinancing a property is a big decision with big consequences. You want to know without a doubt that you're getting 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 home, nothing is more precise than the careful examination of a licensed professional you trust. |