Have equity in your home? Want a lower payment? An appraisal from Sue E Moore can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. The lender's risk is often only the remainder between the home value and the sum outstanding on the loan, so the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and regular value fluctuations in the event a borrower defaults. Lenders were accepting 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 reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the worth of the home is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible, PMI can be expensive to a borrower. It's money-making for the lender because they acquire the money, and they get the money if the borrower is unable to pay, opposite from a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers keep from bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Savvy homeowners can get off the hook beforehand. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. It can take countless years to get to the point where the principal is just 20% of the initial amount borrowed, so it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've obtained over the years counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends indicate falling home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have gained equity before things settled down. A certified, 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 know the market dynamics of our area. At Sue E Moore, we know when property values have risen or declined. We're masters at pinpointing value trends in Akron, Summit County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |