Don't risk your investment with a Property Inspection WaiverIf you're buying or refinancing 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 move forward with your mortgage without an appraisal at all. It's a relatively new concept, and some lenders love it. But what motivated it, and what are the risks for you? 
How does a Property Inspection Waiver work?Basically, your lender determines what your property is worth. They determine the value automatically on a computer, using a database from Fannie Mae in lieu of hiring a local appraiser to personally 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 West Valley Appraisal Services today Get a quote todayWho can get a PIW?The program's limited currently, but it's progressively building to include more transaction types. Your home has to have entries in Fannie Mae's electronic database, so homes which have never been appraised aren't eligible for a PIW. Additionally, you must have an excellent credit score and high assets for approval. Why is it applied?The waiver eliminates appraisal expenses, and it can substantially pare down closing time for buyers. At first glance, this process sounds like a bargain — but there's a key point you will want to consider. With a PIW, your lender is NOT held liable if the assessment is wrong. That's an added bonus for lenders, but presents no protection to the home buyer whatsoever. What could go wrong if I accept a Property Inspection Waiver?The information in Fannie Mae's database is pulled from past appraisals completed by professional appraisers. This data might be accurate to some extent, but by definition, it won't be an up-to-date evaluation of the exterior and interior quality in a building that changes from year by year. Without a professional appraisal of your home, recent improvements, remodels, or damages can easily be omitted by the system. Because of these shortcomings, you can imagine an instance where your home is valued too high by the system evaluating it. If that happens, you could run into snags when it's time to sell. You may not be able to get 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 usually costs a few hundred dollars, but it could save you a great deal more in the future. With a PIW, there is no guarantee you're receiving an honest valuation of your most expensive asset. West Valley Appraisal Services can help. Buying or refinancing a home is a big decision with big consequences. You should know with certainty that you're getting a fair deal, and working with a licensed appraiser is the smartest way to go. Computers and algorithms have assumed a place in nearly every area of modern life, but when it comes to measuring the value of your home, nothing is more precise than the careful assessment of a licensed professional you trust. |