Let Anderson Appraisal Services help you decide if you can eliminate your PMIWhen purchasing a home, a 20% down payment is usually the standard. Since the liability for the lender is often only the remainder between the home value and the amount remaining on the loan, the 20% provides a cushion against the charges of foreclosure, reselling the home, and natural value fluctuations on the chance that a purchaser defaults. PMI can be pricey to a borrower in that $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible. Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.How can homebuyers refrain from bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Smart homeowners can get off the hook a little earlier. The law promises that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. Because it can take many years to arrive at the point where the principal is just 20% of the initial loan amount, it's necessary to know how your home has grown in value. After all, every bit of appreciation you've accomplished over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends hint at declining home values, realize that real estate is local. Your neighborhood might not be minding the national trends and/or your home might have acquired equity before things calmed down. The hardest thing for most homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. It's an appraiser's job to know the market dynamics of their area. At Anderson Appraisal Services, we know when property values have risen or declined. We're experts at determining value trends in Carolina Beach, New Hanover County and surrounding areas. When faced with data from an appraiser, the mortgage company will usually do away with the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |