Getting A Loan With No Appraisal?

May 18th, 2010

There are times when a lender might enter a loan application into the automated underwriting system, and the resulting approval may allow for a “PIW”. A PIW is a Property Inspection Waiver, which means that Fannie Mae or Freddie Mac has decided that due to the characteristics of the particular loan entered that they feel comfortable proceeding without an appraisal being done.

These PIW’s are usually seen on loans with low Loan-To-Value’s (LTV’s), such as 50% up to even 80%, with high credit scores, and low debt ratios.

I have alerted some clients that I can refund most or all of their initial appraisal fee, and tell them that if they choose, no appraisal is needed. Some borrowers still want an appraisal done anyway but many realize that the market is usually pretty efficient, they feel comfortable with the price they paid, and they’d rather save the appraisal fee.

There may be a $75 PIW fee, so if the appraisal cost was $400, the consumer would net a $325 refund by accepting the PIW.

However, a homeowner may be tasked with getting an appraisal anyway by their homeowners insurance company. So the consumer should check with their insurance agent to see if an appraisal is mandatory to establish the level of insurance coverage, or if another method of establishing value is possible.

If you have a low LTV, a high credit score, and a low debt ratio, ask your lender if you qualified for a PIW if they do not mention it. Getting a PIW is not a guarantee, even with all of the above stellar loan traits, but its worth asking about.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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