Appraisal Services of Brandon, Inc . can help you remove your Private Mortgage Insurance
It's generally known that a 20% down payment is accepted when buying a house. Considering the liability for the lender is oftentimes only the remainder between the home value and the sum outstanding on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and natural value fluctuationsin the event a purchaser is unable to pay.
Lenders were working with down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to manage the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower defaults on the loan and the worth of the property is lower than what the borrower still owes on the loan.
PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender consumes all the damages, PMI is beneficial for the lender because they obtain the money, and they get paid if the borrower is unable to pay.
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.
How can a buyer prevent bearing the expense of PMI?
The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Acute home owners can get off the hook sooner than expected. The law states that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent.
Since it can take countless years to get to the point where the principal is just 20% of the original amount borrowed, it's important to know how your home has grown in value. After all, any appreciation you've accomplished over time counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home could have secured equity before things cooled off, so even when nationwide trends predict plunging home values, you should understand that real estate is local.
An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Appraisal Services of Brandon, Inc ., we know when property values have risen or declined. We're masters at determining value trends in Valrico, Hillsborough County and surrounding areas. When faced with figures from an appraiser, the mortgage company will usually drop 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: