"When you buy or refinance a home, your lender usually orders a full appraisal to verify the property is worth at least the loan amount. During a home appraisal, a licensed third-party visits a property, looks at comparable sales (or "comps"), and produces a detailed report about the home and its current value. An appraisal waiver is when the lender decides no in-person appraisal is required because automated tools already provide enough data to support the loan amount."
"These days, lenders rely heavily on automated underwriting systems (AUS) to help evaluate risk. When a lender submits your loan application, the AUS reviews: An abundant national database of prior appraisals. Public tax records. MLS sales data. Property characteristics (bed/bath count, square footage, year built, etc.). Borrower and loan-level risk factors. If the system has enough reliable information about the property and the overall risk is low, it could return a result that prompts the lender to waive the full appraisal process."
"Whether you're buying a home in Phoenix, AZ or a condo in New York City, we'll break down how appraisal waivers work, who qualifies, why lenders use them, and when you might want to say yes-or no-to one. In this article:How appraisal waivers workWho qualifies for an appraisal waiverWhy lenders waive appraisalsBenefits of using an appraisal waiverRisks and limitationsAppraisal waiver vs. appraisal contingency How to get an appraisal waiverBottom lineFAQs How appraisal waivers work"
Lenders usually order full appraisals when buyers purchase or refinance homes to confirm the property value meets the loan amount. An appraisal waiver occurs when the lender determines no in-person appraisal is required because automated underwriting systems provide sufficient data to support the loan amount. AUS tools analyze national appraisal databases, public tax records, MLS sales data, property characteristics, and borrower and loan-level risk factors. If the AUS finds reliable information and low overall risk, it can prompt a waiver. These systems estimate value using comparable sales, past valuations, local price trends, and third-party property data.
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