|
|
Appraisal Professionals, LLC can help you remove your Private Mortgage Insurance
It's typically inferred that a 20% down payment is common when purchasing a home.
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 charges of foreclosure, selling the home again, and natural value fluctuations in the event a purchaser doesn't pay.
Banks were taking down payments as low as 10, 5 and even 0 percent during the mortgage boom of the last decade.
A lender is able to handle the increased risk of the low down payment with Private Mortgage Insurance or PMI.
PMI takes care of the lender in case a borrower defaults on the loan and the value of the home is lower than the loan balance.
Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI is costly to a borrower.
It's lucrative for the lender because they acquire the money, and they get the money if the borrower doesn't pay, different from a piggyback loan where the lender consumes all the costs.
 |
 |
 |
The savings from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Appraisal Professionals, LLC are experts when it comes to value trends in the city of Austin and Williamson County. Contact us today.
|
|
|
How can a home owner prevent bearing the cost of 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 equals 78 percent of the primary loan amount.
The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, keen home owners can get off the hook sooner than expected.
Considering it can take several years to reach the point where the principal is just 80% of the initial amount of the loan, it's necessary to know how your Texas home has increased in value.
After all, any appreciation you've gained over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold?
Even when nationwide trends forecast lower overall home values, understand that real estate is local. Your neighborhood might not be minding the national trends and/or your home could have acquired equity before things declined.
The hardest thing for most homeowners to figure out is just when their home's equity goes over the 20% point. A certified, Texas licensed real estate appraiser can definitely help.
As appraisers, it's our job to keep up with the market dynamics of our area.
At Appraisal Professionals, LLC, we're masters at recognizing value trends in Austin, Williamson County, and surrounding areas, and we know when property values have risen or declined.
Faced with figures from an appraiser, the mortgage company will often drop the PMI with little anxiety. At which time, the homeowner can relish the savings from that point on.
|
|
|
Does your monthly loan payment include a fee for PMI? Call Appraisal Professionals, LLC today at (512) 535-5007 or send us an e-mail. A new appraisal could save you thousands.
|
|
|
Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year
|
|
