Let Mark Schofield Appraisal Services help you learn if you can eliminate your PMIA 20% down payment is typically the standard when buying a house. The lender's risk is generally only the difference between the home value and the amount due on the loan, so the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and natural value changes in the event a borrower is unable to pay. The market was accepting down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender endure the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan protects the lender in the event a borrower defaults on the loan and the worth of the home is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI is costly to a borrower. It's favorable for the lender because they acquire the money, and they get the money if the borrower defaults, opposite 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 homeowners can avoid bearing the cost of PMIThe Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Wise homeowners can get off the hook a little earlier. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. Because it can take many years to reach the point where the principal is just 20% of the original amount borrowed, it's necessary to know how your home has grown in value. After all, all of the appreciation you've obtained over time counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends forecast plummeting 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 acquired equity before things settled down. The difficult thing for almost all home owners to understand 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 know the market dynamics of our area. At Mark Schofield Appraisal Services , we know when property values have risen or declined. We're experts at analyzing value trends in St Johns, Saint Johns County and surrounding areas. Faced with information from an appraiser, the mortgage company will often remove the PMI with little effort. At that time, the home owner can retain the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |