Blue Water Appraisals can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. Because the liability for the lender is usually only the difference between the home value and the amount remaining on the loan, the 20% provides a nice cushion against the costs of foreclosure, reselling the home, and typical value variationsin the event a borrower is unable to pay. The market was working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan guards the lender in the event a borrower doesn't pay on the loan and the market price of the property is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible, PMI is pricey to a borrower. Unlike a piggyback loan where the lender consumes all the deficits, PMI is lucrative for the lender because they obtain the money, and they get paid if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, keen home owners can get off the hook a little early. Considering it can take countless years to get to the point where the principal is just 20% of the original loan amount, it's important to know how your home has appreciated 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 dropped below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home could have secured equity before things settled down, so even when nationwide trends indicate plummeting home values, you should realize that real estate is local. The difficult thing for most home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Blue Water Appraisals, we're experts at determining value trends in North Fort Myers, Lee 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 usually cancel the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |