Appraisal Waiver: How to Get the Appraisal Waived When you are Buying a House

Todd and Oana talk about the appraisal wavier process and how to get appraisals waived when either buying or refinancing. Waiving the appraisal is under the lender’s control and it can be done if certain criteria are met. Appraisal waivers are different than removing the appraisal contingency for a purchase. When a person removes the contingency for an appraisal that just means they will not be able to back out of the purchase based on the value of the appraisal.

Many people have asked the question “do I need an appraisal to buy a house” and the answer is usually “that depends”. It is possible to buy a house with a loan and not have an appraisal. For cash purchases, appraisals are almost never required, but some buyers choose to get them anyway.

Here is the run-down on Appraisal Waivers

No min credit score, but…. the lender has to get a DU approval and DU requires a 620 minimum credit score so it would sort of push you to that as the minimum score. 
No restrictions on value.  IF DU accepts the value entered than that is the acceptable value. 

Here is a snippet of FNMA guide.  The lender doesn’t have to do anything except put the expected value in the appraised value field.  If the DU system accepts that value we are good to go.

What are the eligibility requirements for appraisal waiver considerations?
The appraisal waiver offer will be considered on the transactions below:
Loan casefiles that receive an Approve/Eligible recommendation
One-unit properties, including condominiums
Limited cash-out refinance transactions for principal residences and second homes with a minimum loan to value of 90% or investment properties with a minimum loan to value of 75%.
Cash-out refinance transactions for principal residences with minimum 70% loan to value or second homes or investment properties with a minimum of 60% loan to value
Purchase residences and second homes with a minimum of 80% loan to value, but this changes to 97% to 105% in “high-needs rural” locations and has an inspection contingency.
Purchase of recently constructed homes ie. new construction when there is an existing “as is” prior appraisal on the subject property.
The majority of transactions will not receive an appraisal waiver offer, which means they will require an appraisal by a qualified residential appraiser to establish market value.

Does the appraisal waiver impact the interest rate or fees? Yes, and in a good way – the appraisal waiver takes away the appraisal cost without hits to rates, etc.  In today’s market that can be a savings of $500 – $800 depending on the price point, location, and rush fees.

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