Have equity in your home? Want a lower payment? An appraisal from Chase Tobias can help you get rid of your PMI.A 20% down payment is typically the standard when purchasing a home. Because the liability for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% adds a nice buffer against the charges of foreclosure, selling the home again, and typical value variationsin the event a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it was widespread to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender handle the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower is unable to pay on the loan and the value of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. Unlike a piggyback loan where the lender absorbs all the losses, PMI is money-making for the lender because they obtain the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can refrain from paying PMIWith 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 primary loan amount. Keen homeowners can get off the hook beforehand. The law promises that, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the original amount borrowed, so it's essential to know how your home has increased in value. After all, every bit of appreciation you've gained over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home might have acquired equity before things calmed down, so even when nationwide trends predict plunging home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Chase Tobias, we know when property values have risen or declined. We're masters at analyzing value trends in Danville, Montour County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |