When you are in the process of buying a home, you will likely be told you need to hire a licensed or certified home appraiser to appraise the property. The appraiser’s job is to review your potential new home and report on the home’s value. Your home’s value is based on the research of recent, comparable home sales in the area, as well as an in-person analysis of the property itself.
An appraisal is also a way for mortgage lenders to know the home is worth the sale price and loan amount and can be used as collateral if a borrower defaults on their loan. However, there is such a thing as an appraisal waiver.
To acquire an appraisal waiver, you must work with a direct mortgage company that offers this benefit. Wyndham Capital is one of the few mortgage lenders who utilize Fannie Mae’s Day 1 Certainty. In a nutshell, Day 1 Certainty helps make the mortgage application process much smoother and quicker for applicants in a number of different ways, such as providing an appraisal waiver.
There are two major perks to Fannie Mae’s tool. Here’s how it benefits you as a borrower:
1. Appraisal waivers
Also known as a property inspection waiver, an appraisal waiver allows a homeowner to forgo hiring (and paying for) an appraiser to perform an appraisal on their current or prospective home. With Day 1 Certainty, you may not need an appraisal for purchase or refinance loans.
Benefits of an Appraisal Waiver
There are many reasons one may choose to obtain an appraisal waiver. In addition to saving you the cost of an appraisal fee (which could be upwards of $500), it will also speed up the loan process. You won’t need to schedule and wait for an appraisal and then wait again for the official appraisal amount. Instead, a lender can waive the requirement and continue with your application in seconds.
While appraisal waivers have always been available, they have become more popular since the COVID-19 pandemic began. An appraisal waiver means less time and interactions with outside companies. This adheres to social distancing guidelines set forth in many states. Even more, with the time saved by using an appraisal waiver, homebuying can happen more quickly. This stimulates the economy and keeps the housing market in tip-top shape.
Who Can Get an Appraisal Waiver?
Eligibility for an appraisal waiver depends on a variety of factors, including the type of home you are purchasing. Appraisal waivers are typically reserved for buying or refinancing single family homes and condos. Approval of an appraisal waiver also depends on the loan-to-ratio value of the property. Typically excluded from appraisal waivers are new construction or manufactured homes, co-ops and multi-family properties. Check with your lender to see if you are eligible for an appraisal waiver.
2. Employment Verification
If a lender can instantly verify your employment, that means they can instantly validate your income. In short, that keeps you from having to provide W-2s and any other proof of income. This saves you time and moves you along the homebuying journey more quickly. With all of these digital advantages, you will be in your dream home before you know it.
How to Get an Appraisal Waiver?
To get an appraisal waiver, you need to work with a direct mortgage lender who uses the tools available to provide this service. As mentioned, one of these tools is Day 1 Certainty.
Once you consent to have your electronic data and credit report pulled, your mortgage lender will run the Fannie Mae program to see if you’re eligible. You’ll have an answer within seconds and we’ll get to work right away to give you a great home lending experience possible.
For those who don’t qualify, Freddie Mac has its own version of Day 1 Certainty called Loan Advisor. If you’re not eligible with Fannie Mae, your lender can run Freddie Mac’s program to see if that’s a better fit for you.
Wyndham Capital has adopted Day 1 Certainty and Loan Advisor well ahead of the rest of the mortgage industry. It’s part of our commitment to provide you with an outstanding customer service experience and turn times on average 30 percent faster than the industry average.
Want to see if you're eligible for an appraisal waiver? Get in touch with one of our loan officers today!