Nordquist Appraisal LLC can help you remove your Private Mortgage Insurance
It's largely understood that a 20% down payment is accepted when getting a mortgage. Because the risk for the lender is oftentimes only the difference between the home value and the sum remaining on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and natural value changeson the chance that a purchaser is unable to pay.
During the recent mortgage boom of the last decade, it became common to see lenders taking down payments of 10, 5 or often 0 percent. A lender is able to endure the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. This additional plan guards the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than what is owed on the loan.
PMI can be pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible. It's lucrative for the lender because they collect the money, and they receive payment if the borrower is unable to pay, unlike 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 can homeowners prevent paying PMI?
With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Acute home owners can get off the hook ahead of time. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount equals just 80 percent.
It can take many years to arrive at the point where the principal is only 20% of the initial amount of the loan, so it's crucial to know how your home has grown in value. After all, every bit of appreciation you've accomplished over the years counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be adopting the national trends and/or your home might have secured equity before things settled down, so even when nationwide trends predict plunging home values, you should understand that real estate is local.
The difficult thing for almost all 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 know the market dynamics of our area. At Nordquist Appraisal LLC, we're masters at determining value trends in Pittsburgh, Allegheny County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Would you like to save money by not having to pay for Private Mortgage Insurance? We can help. Simply fill out the form below as completely as possible and we'll send you information on how to save PMI expenses, with no obligation to you. We guarantee your privacy.