|
|
ASAP Appraisal Services, Inc. can help you remove your Private Mortgage Insurance
It's widely understood that a 20% down payment is common when purchasing a home.
The lender's only exposure is usually just the remainder between the home value and the sum due on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and typical value fluctuations on the chance that a borrower is unable to pay.
During the recent mortgage boom of the last decade, it was customary to see lenders only asking for down payments of 10, 5 or even 0 percent.
A lender is able to endure the additional risk of the small down payment with Private Mortgage Insurance or PMI.
PMI covers the lender in the event a borrower defaults on the loan and the market price of the house is less than the loan balance.
Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible, PMI can be pricey to a borrower.
It's profitable for the lender because they secure the money, and they are covered if the borrower defaults, as opposed to a piggyback loan where the lender takes in all the losses.
 |
 |
 |
The amount you keep from dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. ASAP Appraisal Services, Inc. are experts when it comes to value trends in the city of Mesa and Maricopa County. Contact us today.
|
|
|
How home owners can refrain from bearing the cost of PMI
The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount.
The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, smart homeowners can get off the hook ahead of time.
It can take a significant number of years to arrive at the point where the principal is just 80% of the initial loan amount, so it's crucial to know how your Arizona home has appreciated in value.
After all, all of the appreciation you've gained over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% mark?
Your neighborhood might not conform to national trends and/or your home may have gained equity before things cooled off. So even when nationwide trends hint at a reduction in home values, you should realize that real estate is local.
The toughest thing for almost all people to figure out is whether their home equity has exceeded the 20% point. An accredited, Arizona licensed real estate appraiser can surely help.
It's an appraiser's job to know the market dynamics of their area.
At ASAP Appraisal Services, Inc., we know when property values have risen or declined. We're masters at identifying value trends in Mesa, Maricopa County, and surrounding areas.
When faced with figures from an appraiser, the mortgage company will most often do away with the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
|
|
|
Has your home value appreciated since you first purchased? Call ASAP Appraisal Services, Inc. today at (480)200-6816. You may be able to save money by removing your Private Mortgage Insurance payment.
|
|
|
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
|
|
