Let Metro Appraisal Group help you determine if you can cancel your PMIA 20% down payment is typically the standard when getting a mortgage. Considering the risk for the lender is oftentimes only the difference between the home value and the sum due on the loan, the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and regular value variationsin the event a borrower defaults. The market was working with down payments down to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower defaults on the loan and the worth of the property is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be costly to a borrower. Different from a piggyback loan where the lender consumes all the damages, PMI is favorable for the lender because they acquire the money, and they get paid 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 expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Savvy home owners can get off the hook ahead of time. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. It can take countless years to reach the point where the principal is only 20% of the original amount of the loan, so it's necessary to know how your home has appreciated in value. After all, any appreciation you've gained over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home might have secured equity before things calmed down, so even when nationwide trends forecast decreasing home values, you should realize that real estate is local. The hardest thing for almost all homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Metro Appraisal Group, we know when property values have risen or declined. We're masters at recognizing value trends in Redington Beach, Pinellas County and surrounding areas. When faced with data from an appraiser, the mortgage company will often cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |