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Have equity in your home? Want a lower payment? An appraisal from Turner Consulting and Evaluation can help you get rid of your PMI.
When purchasing a home, a 20% down payment is typically the standard.
The lender's only liability is usually just the difference between the home value and the amount remaining on the loan, so the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and natural value variations on the chance that a borrower is unable to pay.
Lenders were working with down payments discounted to 10, 5 and frequently 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 protects the lender if a borrower defaults on the loan and the market price of the home is less than the balance of the loan.
Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be costly to a borrower.
It's beneficial for the lender because they obtain the money, and they receive payment if the borrower doesn't pay, unlike a piggyback loan where the lender takes in all the losses.
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Does your monthly mortgage payment include a fee PMI? Call Turner Consulting and Evaluation today at 9707594389 or send us an e-mail. Documentation of your home's present value could save you thousands.
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How can a buyer prevent bearing the cost of PMI?
With the passage of The Homeowners Protection Act of 1998, lenders are forced to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount on most loans.
The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, smart home owners can get off the hook a little earlier.
It can take many years to reach the point where the principal is just 80% of the original amount of the loan, so it's important to know how your Colorado home has increased in value.
After all, every bit of appreciation you've gained over the years counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold?
Even when nationwide trends forecast decreasing home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have acquired equity before things simmered down.
The toughest thing for almost all people to determine is just when their home's equity goes over the 20% point. An accredited, Colorado licensed real estate appraiser can surely help.
Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job!
At Turner Consulting and Evaluation, we know when property values have risen or declined. We're masters at determining value trends in Asheville, Buncombe County, and surrounding areas.
When faced with figures from an appraiser, the mortgage company will often drop the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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Does your monthly mortgage payment include a fee for PMI? Call Turner Consulting and Evaluation today at 9707594389 or send us an e-mail. A new appraisal could save you thousands.
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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
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