Have equity in your home? Want a lower payment? An appraisal from Furr Appraisal Service can help you get rid of your PMI.It's generally understood that a 20% down payment is the standard when getting a mortgage. The lender's liability is often only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and regular value changes in the event a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became widespread to see lenders taking down payments of 10, 5 or even 0 percent. A lender is able to handle the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender if a borrower defaults on the loan and the value of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and generally isn't even tax deductible, PMI can be costly to a borrower. Different from a piggyback loan where the lender takes in all the costs, PMI is lucrative for the lender because they collect the money, and they get the money if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners avoid bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law stipulates that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent. So, acute homeowners can get off the hook a little early. Considering it can take countless years to arrive at the point where the principal is just 20% of the initial amount of the loan, it's essential to know how your home has grown in value. After all, any appreciation you've acquired over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends forecast declining home values, be aware that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have secured equity before things cooled off. The hardest thing for most homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to keep up with the market dynamics of their area. At Furr Appraisal Service, we know when property values have risen or declined. We're experts at analyzing value trends in Camden, Benton County and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often drop the PMI with little effort. At that 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: |