Let Preferred Appraisal Service help you discover if you can eliminate your PMIWhen purchasing a home, a 20% down payment is typically the standard. The lender's risk is often only the remainder between the home value and the amount outstanding on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and regular value variations in the event a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it became widespread to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to endure the added risk of the low down payment with Private Mortgage Insurance or PMI. This added plan takes care of the lender in the event a borrower defaults on the loan and the worth of the home is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible, PMI is pricey to a borrower. Contradictory to a piggyback loan where the lender takes in all the losses, PMI is profitable for the lender because they collect the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner keep from bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law promises that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, smart homeowners can get off the hook a little earlier. Since it can take many years to get to the point where the principal is just 20% of the original amount of the loan, it's crucial to know how your home has grown in value. After all, any appreciation you've gained over the years counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be minding the national trends and/or your home may have acquired equity before things calmed down, so even when nationwide trends forecast declining home values, you should understand that real estate is local. A certified real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Preferred Appraisal Service, we know when property values have risen or declined. We're masters at pinpointing value trends in Washington County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |