Don't risk your investment with a Property Inspection WaiverIf you are getting a loan for a home, your lender might give you the option to use a Property Inspection Waiver (PIW) on your application. The waiver program, initiated by Fannie Mae in 2017, allows you to move forward with your mortgage without an appraisal. It's a relatively new concept, and some lenders love it. But what prompted 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 the value automatically on a computer, employing a database from Fannie Mae rather than hiring a local appraiser to inspect the home you're about to buy. So, rather than a firsthand evaluation, lenders rely solely on computer methods to sift through an array of previously collected data. Get your appraisal from Touchstone Appraisal, LLC today Get a quote onlineWho is qualified for a Property Inspection Waiver?The program's limited currently, but it is being built continually to include more types of transactions. Your property has to have entries in Fannie Mae's electronic database, so homes that have never been appraised are not eligible for a PIW. Additionally, you must have an excellent credit score and high assets for approval. Why do lenders use Property Inspection Waivers?The waiver omits appraisal expenses, and it can cut closing time substantially for buyers. Outwardly, this simplified process seems like a good deal — but there's a bottom line you'll want to recognize. With a PIW, your lender is NOT held responsible if the valuation turns out to be wrong. That's a bonus for lenders, but offers no protection to the buyer. What could go wrong?The information in Fannie Mae's database is pulled from previous appraisal reports done by professional appraisers. This data might be relatively accurate, but by definition, it will not 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, renovations, or damages could certainly be omitted by the system. Because of these shortcomings, you can imagine a scenario where your property is valued too high by the system evaluating it. If that happens, you could run into snags when it's time to put it back on the market. You may 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 is the bottom line?An accurate appraisal usually costs a few hundred dollars, but it can save you thousands in the long run. With a PIW, there's no guarantee you're receiving an honest valuation of your most expensive asset. Touchstone Appraisal, LLC can help. Buying or refinancing a house is a big decision with big consequences. You should know without a doubt that you're receiving a fair deal, and working with a licensed appraiser is the safest action you can take. 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. |