Have equity in your home? Want a lower payment? An appraisal from Baxter Appraisal Group can help you get rid of your PMI.A 20% down payment is typically the standard when getting a mortgage. The lender's risk is oftentimes only the difference between the home value and the amount due on the loan, so the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and regular value fluctuations on the chance that a purchaser defaults. Lenders were working with down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender endure the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan guards the lender in the event a borrower defaults on the loan and the worth of the house is lower than the loan balance. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. It's advantageous for the lender because they secure the money, and they get paid if the borrower defaults, unlike a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers avoid bearing the expense of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Savvy homeowners can get off the hook beforehand. The law promises that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. Since it can take countless years to reach the point where the principal is just 20% of the initial amount borrowed, it's necessary to know how your home has increased in value. After all, all of the appreciation you've obtained over time counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends indicate decreasing home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have acquired equity before things settled down. The toughest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. It is an appraiser's job to understand the market dynamics of their area. At Baxter Appraisal Group, we're experts at identifying value trends in Byron, Peach County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will most often drop 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: |