Appraisal Services of Brandon, Inc . can help you remove your Private Mortgage InsuranceA 20% down payment is typically accepted when getting a mortgage. Because the risk for the lender is often only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and typical value changesin the event a purchaser defaults. During the recent mortgage upturn of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the market price of the home is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be expensive to a borrower. It's favorable for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, unlike 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 home owners avoid bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Smart home owners can get off the hook ahead of time. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to reach the point where the principal is just 20% of the initial amount of the loan, so it's essential to know how your home has increased in value. After all, all of the appreciation you've acquired over time counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends predict declining home values, be aware that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have secured equity before things settled down. The difficult thing for many home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. 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 pinpointing value trends in Valrico, Hillsborough County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually cancel the PMI with little effort. At that time, the homeowner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |