Appraisal-One can help you remove your Private Mortgage InsuranceA 20% down payment is typically the standard when getting a mortgage. Because the liability for the lender is often only the difference between the home value and the sum due on the loan, the 20% provides a nice buffer against the expenses of foreclosure, reselling the home, and regular value changeson the chance that a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became common to see lenders requiring 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 supplemental policy guards the lender in the event a borrower doesn't pay on the loan and the worth of the home is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible, PMI is pricey to a borrower. It's money-making for the lender because they acquire the money, and they get paid if the borrower defaults, separate from a piggyback loan where the lender takes in all the deficits. 
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 makes the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law guarantees that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, acute home owners can get off the hook sooner than expected. It can take countless years to get to the point where the principal is only 20% of the original amount of the loan, so it's crucial to know how your home has increased in value. After all, every bit of appreciation you've gained over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends forecast falling home values, realize that real estate is local. Your neighborhood might not be following the national trends and/or your home could have secured equity before things calmed down. The hardest thing for many home owners 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 understand the market dynamics of their area. At Appraisal-One, we know when property values have risen or declined. We're masters at determining value trends in Huntington Beach, Orange County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally do away with the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |