The appraisal process is an important step when buying a home. When applying for a mortgage, the loan amount depends on the value of the home appraisal. If you submitted an offer higher than what the home is appraised for, then you might not get your full loan amount financed and could pay more than the home is worth.
In some instances, a home buyer might be tempted to decline the in-person appraisal as a way to save time and money when completing the mortgage process. This is known as an appraisal waiver. Instead of an in-person home evaluation that is done by an appraiser, the lender will use existing data and previous home value information to determine the value of the property.
This could give the home buyer a competitive advantage if the property they are making an offer on is in demand. In a competitive market, if a borrower has an appraisal waiver, then they can do zero-day appraisal contingency since an appraisal is not needed, which makes the offer stronger.
Appraisal waivers are only offered on conventional mortgages when you are buying or refinancing a home. Fannie Mae determines rules and regulations on who is eligible for an appraisal waiver and on what types of properties. As long as the borrower is putting 20% down with an excellent credit score and can prove their available assets, then the borrower could be approved for an appraisal waiver.
The guidelines to qualify for an appraisal waiver are detailed and constantly changing. Working with a qualified mortgage lender is the best way to know eligibility. At Georgia Platinum Mortgage, we only need a borrower’s completed application, the property address, and the offer price to run in through the Fannie Mae or Freddie Mac system to determine if the homebuyer will be granted an appraisal waiver.