Have equity in your home? Want a lower payment? An appraisal from Land and More, Inc. can help you get rid of your PMI.A 20% down payment is typically accepted when getting a mortgage. The lender's liability is usually only the difference between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and typical value changes on the chance that a borrower defaults. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the added risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower is unable to pay on the loan and the market price of the house is less than the loan balance. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible. Contradictory to a piggyback loan where the lender consumes all the deficits, PMI is money-making for the lender because they secure the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can prevent paying PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law guarantees that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, savvy homeowners can get off the hook sooner than expected. Since it can take many years to reach the point where the principal is just 20% of the original amount borrowed, it's crucial to know how your home has increased in value. After all, any appreciation you've accomplished over time counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not be heeding the national trends and/or your home may have gained equity before things settled down, so even when nationwide trends signify plummeting home values, you should understand that real estate is local. The hardest thing for many home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to recognize the market dynamics of our area. At Land and More, Inc., we're experts at identifying value trends in Clarkesville, Habersham County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. 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: |