Let MD Appraisal Solutions help you determine if you can eliminate your PMIA 20% down payment is typically the standard when buying a house. Because the liability for the lender is often only the difference between the home value and the amount remaining on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and natural value changes on the chance that a borrower defaults. The market was taking down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the added risk of the low down payment with Private Mortgage Insurance or PMI. This supplemental policy covers the lender in case a borrower defaults on the loan and the market price of the house is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI can be pricey to a borrower. It's money-making for the lender because they collect the money, and they receive payment if the borrower doesn't pay, separate from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can refrain from bearing the cost of PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law promises that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. So, keen homeowners can get off the hook ahead of time. Considering it can take countless years to reach the point where the principal is only 20% of the original amount of the loan, it's important to know how your home has grown in value. After all, all of the appreciation you've gained over the years counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not be following the national trends and/or your home might have gained equity before things cooled off, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At MD Appraisal Solutions, we know when property values have risen or declined. We're experts at analyzing value trends in Collin and Denton County and surrounding areas. When faced with information from an appraiser, the mortgage company will often drop the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |