Have equity in your home? Want a lower payment? An appraisal from Qualls Appraisals can help you get rid of your PMI.A 20% down payment is typically the standard when buying a house. Considering the liability for the lender is often only the difference between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and typical value fluctuationson the chance that a borrower is unable to pay. During the recent mortgage upturn of the last decade, it became customary to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender handle the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the worth of the property is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and many times isn't even tax deductible, PMI is pricey to a borrower. Separate from a piggyback loan where the lender consumes all the costs, PMI is advantageous for the lender because they acquire the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer avoid bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute homeowners can get off the hook sooner than expected. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. It can take countless years to get to the point where the principal is just 20% of the original amount of the loan, so it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've obtained over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Despite the fact that nationwide trends forecast decreasing home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home may have secured equity before things settled down. A certified, licensed 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 keep up with the market dynamics of our area. At Qualls Appraisals, we're experts at determining value trends in Troy, Montgomery County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will most often drop the PMI with little trouble. At that time, the home owner can relish the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |