Have equity in your home? Want a lower payment? An appraisal from GA Appraisal Services can help you get rid of your PMI.
A 20% down payment is typically the standard when buying a house. Since the liability for the lender is usually only the difference between the home value and the sum remaining on the loan, the 20% adds a nice cushion against the expenses of foreclosure, reselling the home, and natural value variationsin the event a purchaser is unable to pay.
Banks were working with down payments down to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the additional risk of the small down payment with Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower is unable to pay on the loan and the worth of the property is less than the loan balance.
PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible. Contradictory to a piggyback loan where the lender consumes all the deficits, PMI is favorable for the lender because they secure the money, and they receive payment if the borrower doesn't pay.
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.
How can buyers refrain from bearing the expense of PMI?
With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute homeowners can get off the hook beforehand. The law guarantees that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent.
It can take countless years to reach the point where the principal is only 20% of the initial 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 achieved over time counts towards dismissing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home might have acquired equity before things cooled off, so even when nationwide trends predict decreasing home values, you should realize that real estate is local.
An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. It is an appraiser's job to understand the market dynamics of their area. At GA Appraisal Services, we know when property values have risen or declined. We're masters at determining value trends in Hawkinsville, Pulaski County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often eliminate the PMI with little effort. At that 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: