Hometown Appraiser, LLC can help you remove your Private Mortgage InsuranceIt's largely inferred that a 20% down payment is common when purchasing a home. The lender's liability is oftentimes only the remainder between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and natural value variations on the chance that a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower is unable to pay on the loan and the value of the property is less than the loan balance. PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. Separate from a piggyback loan where the lender consumes all the damages, PMI is advantageous for the lender because they secure the money, and they get the money 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 home owners refrain from bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Savvy home owners can get off the hook ahead of time. The law pledges that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take many years to reach 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 increased in value. After all, every bit of appreciation you've gained over the years counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be heeding the national trends and/or your home may have secured equity before things simmered down, so even when nationwide trends forecast falling home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Hometown Appraiser, LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Ocean Isle Beach, Brunswick County and surrounding areas. Faced with data from an appraiser, the mortgage company will often eliminate the PMI with little trouble. At that time, the homeowner can retain the savings from that point on.
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Paying PMI?
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