Have equity in your home? Want a lower payment? An appraisal from Accurate Appraisals LLC can help you get rid of your PMI.It's generally known that a 20% down payment is the standard when purchasing a home. Since the liability for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice buffer against the charges of foreclosure, selling the home again, and regular value fluctuationson the chance that a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it was customary to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to endure the increased risk of the low down payment with Private Mortgage Insurance or PMI. PMI protects the lender if a borrower defaults on the loan and the worth 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 payment and frequently isn't even tax deductible, PMI is pricey to a borrower. It's lucrative for the lender because they secure the money, and they get paid if the borrower doesn't pay, opposite from a piggyback loan where the lender absorbs 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 a home owner avoid paying PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Savvy homeowners can get off the hook ahead of time. The law guarantees that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. Because it can take many years to get to the point where the principal is only 20% of the original loan amount, it's crucial to know how your home has grown in value. After all, every bit of appreciation you've accomplished over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends indicate declining home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have secured equity before things cooled off. The toughest thing for many homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Accurate Appraisals LLC, we know when property values have risen or declined. We're masters at identifying value trends in Wilmington, New Castle County and surrounding areas. Faced with figures from an appraiser, the mortgage company will usually remove the PMI with little trouble. At which 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: |