Let Lyman Appraisal Services, LLC help you determine if you can get rid of your PMIWhen getting a mortgage, a 20% down payment is usually the standard. Since the liability for the lender is oftentimes only the difference between the home value and the sum due on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and regular value variationsin the event a borrower defaults. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower defaults on the loan and the market price of the property is less than the balance of the loan. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible. It's advantageous for the lender because they collect the money, and they get paid if the borrower is unable to pay, separate from a piggyback loan where the lender takes in all the damages. 
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 paying PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Savvy home owners can get off the hook beforehand. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. Since it can take many years to reach the point where the principal is just 20% of the original loan amount, it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over time counts towards dismissing 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 indicate plummeting home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home could have acquired equity before things cooled off. The toughest thing for most home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Lyman Appraisal Services, LLC, we know when property values have risen or declined. We're masters at identifying value trends in Cornelius, Lincoln County and surrounding areas. Faced with figures from an appraiser, the mortgage company will often remove the PMI with little effort. At which 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: |