Appraisal Waivers and Property Inspection Waivers

Appraisals have come to be very common, and are a normal part of many home loan transactions. The appraisal, which is a formal determination by an independent third party of what a property is worth, is important to you (as the borrower) because it gives you an idea as to whether you’re overpaying for your home. It’s also very important to your lender, as it’s what they use to determine the collateral value of your home. If this collateral value is too low compared to the initial loan amount, your lender may require you to purchase mortgage insurance to further protect them against a loss.


An appraiser inspecting a home’s entrance.

The biggest downside of the appraisal process is that it can be costly and time-consuming for borrowers. The average cost of an appraisal on a single-family property can range from $350-$800, and it can take up to a full month to get an appraiser on-site to inspect the home in a volatile or high-demand market.

With that in mind, it’s no wonder that many borrowers look into the process of obtaining an appraisal waiver. These waivers can allow you to simplify or skip the home appraisal process on purchase loans, refinance loans, and even sometimes on cash-out refinance loans.

These waivers are granted by automated underwriting systems which determine the value of a property based on a range of available data including any recent sales prices on the home and the values of similar properties in the surrounding area.

A slight downside to the appraisal waiver, however, is that there’s no set criteria on which properties, borrowers, or loans qualify for one. The decision to grant and honor these waivers is made by each individual mortgage lender based on their own assessment.

There are also times where it may not be in a borrower’s best interest to seek or exercise an appraisal waiver.

Luckily, here at Arizona Lending Group we’re committed to ensuring that our borrowers have the simplest and cheapest loan origination process possible. To help us achieve this, we screen each and every one of our borrowers individually during loan underwriting to determine whether they’re eligible for an appraisal waiver. Your loan originator will then discuss the pros and cons of these waivers for your specific situation. If you’re interested in determining your eligibility, or just have questions about this process – give us a call today! We’re here to help you.


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