Boardwalk Certified Appraisers, LLC. can help you remove your Private Mortgage Insurance
It's largely known that a 20% down payment is the standard when purchasing a home. The lender's risk is generally only the remainder between the home value and the amount outstanding on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and regular value variations in the event a purchaser doesn't pay.
During the recent mortgage upturn of the last decade, it became customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the additional risk of the low down payment with Private Mortgage Insurance or PMI. This added plan takes care of the lender in case a borrower defaults on the loan and the worth of the house is less than the loan balance.
Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI is pricey to a borrower. It's profitable for the lender because they acquire the money, and they get the money if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the deficits.
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.
How homebuyers can prevent bearing the expense of PMI
With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law pledges that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, smart homeowners can get off the hook a little early.
Since it can take countless years to reach the point where the principal is only 20% of the original amount borrowed, it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over the years counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends signify decreasing home values, be aware that real estate is local. Your neighborhood might not be following the national trends and/or your home may have secured equity before things calmed 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 difficult thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Boardwalk Certified Appraisers, LLC., we know when property values have risen or declined. We're experts at determining value trends in Villa Rica, Carroll County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually remove the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: