Have equity in your home? Want a lower payment? An appraisal from Mason's Appraisal Service can help you get rid of your PMI.A 20% down payment is typically accepted when purchasing a home. Considering the risk for the lender is usually only the remainder between the home value and the amount due on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and typical value changeson the chance that a purchaser is unable to pay. Lenders were working with down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower doesn't pay on the loan and the worth of the home is lower than what the borrower still owes on the loan. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible. Unlike a piggyback loan where the lender takes in all the losses, PMI is money-making for the lender because they acquire the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers avoid paying PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Acute home owners can get off the hook ahead of time. The law guarantees that, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. Considering it can take countless years to reach the point where the principal is only 20% of the original amount borrowed, it's necessary to know how your home has increased in value. After all, any appreciation you've achieved over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends forecast falling home values, be aware that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home may have gained equity before things cooled off. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. As appraisers, it's our job to know the market dynamics of our area. At Mason's Appraisal Service, we're experts at recognizing value trends in Maysville, Mason County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. 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: |