What is the purpose of an appraisal waiver?

An appraisal waiver serves the purpose of eliminating the need for an appraisal in certain lower-risk transactions. This is particularly beneficial in situations where the lender assesses that the risk of the transaction is manageable based on various factors, such as the borrower's creditworthiness and the property's market conditions. By waiving the requirement for an appraisal, the process becomes more streamlined, allowing for faster closings and reducing costs for both the lender and the borrower. This can be especially advantageous in a competitive housing market where speed is often crucial.

The other options do not align with the primary function of an appraisal waiver. For instance, reducing sale prices is not a direct outcome of waiving an appraisal; instead, the sale price is typically determined by market forces and negotiations. Delaying the mortgage process contradicts the intent of an appraisal waiver, which is to expedite it. Lastly, increasing the requirements for appraisals runs counter to the concept of waiving them entirely, as an appraisal waiver simplifies requirements rather than adding to them.