Let Anna Hall Appraisals LLC help you determine if you can get rid of your PMIIt's widely known that a 20% down payment is accepted when buying a house. The lender's liability is oftentimes only the difference between the home value and the amount outstanding on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and natural value changes in the event a borrower defaults. During the recent mortgage upturn of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to handle the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender if a borrower defaults on the loan and the worth of the house is less than the loan balance. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the damages, PMI is lucrative for the lender because they obtain the money, and they get the money 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 homebuyers prevent paying PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Smart homeowners can get off the hook sooner than expected. The law designates that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. It can take many years to get to the point where the principal is only 20% of the initial amount of the loan, so it's important to know how your home has grown in value. After all, all of the appreciation you've accomplished over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends indicate falling home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home may have acquired equity before things settled down. The hardest thing for many homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to recognize the market dynamics of their area. At Anna Hall Appraisals LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Swansboro, Onslow County and surrounding areas. When faced with data from an appraiser, the mortgage company will usually remove the PMI with little anxiety. 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: |