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Have equity in your home? Want a lower payment? An appraisal from Able Appraisals can help you get rid of your PMI.
A 20% down payment is typically the standard when buying a house.
The lender's only risk is typically just the remainder between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value changes in the event a purchaser doesn't pay.
During the recent mortgage boom that our country recently experienced, it was widespread to see lenders only asking for down payments of 10, 5 or sometimes 0 percent.
A lender is able to handle the added risk of the reduced down payment with Private Mortgage Insurance or PMI.
This added policy covers the lender if a borrower is unable to pay on the loan and the value of the property is lower than what is owed on the loan.
PMI can be pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and on many occasions isn't even tax deductible.
It's favorable for the lender because they acquire the money, and they are covered if the borrower is unable to pay, as opposed to a piggyback loan where the lender absorbs all the damages.
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Does your monthly mortgage payment include a fee PMI? Call Able Appraisals today at 8657672488 or send us an e-mail. A new appraisal could save you thousands.
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How can homeowners keep from bearing the expense of PMI?
The Homeowners Protection Act of 1998 forces the lenders on the majority of loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount.
The law pledges that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, keen homeowners can get off the hook sooner than expected.
It can take many years to get to the point where the principal is only 80% of the initial amount of the loan, so it's important to know how your Tennessee home has grown in value.
After all, any appreciation you've gained over the years counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold?
Even when nationwide trends hint at lower overall home values, realize that real estate is local. Your neighborhood may not be following the national trends and/or your home could have secured equity before things cooled off.
The difficult thing for almost all homeowners to figure out is whether their home equity has exceeded the 20% point. An accredited, Tennessee licensed real estate appraiser can surely help.
Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job!
At Able Appraisals, we're experts at determining value trends in Gray, Grainger County, and surrounding areas, and we know when property values have risen or declined.
Faced with information from an appraiser, the mortgage company will often do away with the PMI with little trouble. At which time, the homeowner can enjoy the savings from that point on.
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Is PMI something increasing your monthly mortgage payment? Call Able Appraisals today at 8657672488 or send us an e-mail. A current appraisal could save you thousands.
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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
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