Joseph Mier & Associates 906 CM Fagan Dr; Suite 4A
Hammond, LA 70403
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Don't risk your investment with a Property Inspection Waiver

If you’re buying or refinancing 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 move forward with your mortgage without getting an appraisal. It’s a newer concept, and some lenders love it. But what caused it, and what risks are there for you as a home buyer?

How do PIWs work?

Basically, the task of deciding how much your house is worth falls into the hands of your lender. They determine the value systematically on a computer, using an online database from Fannie Mae rather than hiring a local appraiser to personally inspect the property you’re getting ready to buy. So, rather than a hands-on evaluation, lenders rely solely on computer methods to sort through a pile of previously collected information.

Who is eligible for a Property Inspection Waiver?

The program is currently limited, but it is including more types of transactions continuously. Your property 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.

Get your appraisal from Joseph Mier & Associates

What could go wrong if We agree to a PIW?

The information in Fannie Mae’s database is derived from past appraisal reports completed by professional appraisers. This data might be somewhat accurate, but it won’t necessarily be a current assessment of the exterior and interior quality in a building that changes from year by year. Without a professional appraisal of your home, new improvements and/or damages can easily be missed by the system.

Because of these deficiencies, it’s easy to 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 list it for sale. You could end up getting far less than you paid, and you’ll have no recourse against your lender when the money falls short.

What is the bottom line?

An accurate, professional appraisal usually costs a few hundred dollars, but it could save you thousands (or tens of thousands) in the future. With a Property Inspection Waiver, there’s absolutely no guarantee you’re getting an honest valuation of your most expensive asset.

Joseph Mier & Associates can help.

Buying or refinancing a property is a big decision with big consequences. You demand to 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 are 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 examination of a licensed professional you trust.

Why is a PIW used?

The waiver eliminates appraisal fees, and it can shorten closing time substantially for buyers. Outwardly, this streamlined process sounds like a bargain — but there’s a bottom line you’ll want to recognize. With a PIW, your lender is NOT held responsible if the valuation winds up being wrong. That’s great for lenders, but awful for the home buyer.