Let Advanced Appraisal Experts help you figure out if you can cancel your PMIIt's widely known that a 20% down payment is common when getting a mortgage. Since the risk for the lender is oftentimes only the remainder between the home value and the amount remaining on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and regular value variationsin the event a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the market price of the property is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI is pricey to a borrower. Separate from a piggyback loan where the lender absorbs all the losses, PMI is money-making for the lender because they collect the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a buyer refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Savvy homeowners can get off the hook a little earlier. The law stipulates that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the original loan amount, so it's essential to know how your home has increased in value. After all, any appreciation you've gained over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home could have gained equity before things calmed down, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. The hardest thing for most home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Advanced Appraisal Experts, we know when property values have risen or declined. We're experts at pinpointing value trends in Bronx, Bronx County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little effort. At which time, the home owner can relish the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |