What is an appraisal waiver?

An appraisal waiver refers to a lender's decision to process a loan without the need for a formal appraisal. This can occur when the lender has sufficient information to assess the property’s value through other means, such as automated valuation models (AVMs), recent sales data, or the borrower's creditworthiness, thereby simplifying the loan process.

Using an appraisal waiver can expedite the financing process for both buyers and lenders, as it eliminates the time and cost associated with obtaining a traditional appraisal. This approach is particularly common in certain lending programs where the lender has established criteria that allow them to make a sound decision without the detailed report of an appraiser.

The other options do not accurately capture the essence of what an appraisal waiver is. A formal appraisal requirement for all loans would imply that an appraisal is mandatory in all cases, which is not the situation in scenarios where an appraisal waiver is granted. A type of appeal for a disputed appraisal involves a different process concerning disagreements over property values, while an additional fee related to property appraisals does not pertain to the waiver itself, as the waiver eliminates the need for a formal appraisal altogether, thereby avoiding associated fees.