AppraisalsByDana, LLC. can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. Since the liability 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 costs of foreclosure, selling the home again, and regular value fluctuationson the chance that a borrower defaults. During the recent mortgage upturn of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to manage the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender in the event a borrower doesn't pay on the loan and the value of the home is lower than what is owed on the loan. PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible. It's profitable for the lender because they acquire the money, and they receive payment if the borrower doesn't pay, opposite from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers prevent bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law pledges 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 arrive at the point where the principal is only 20% of the original loan amount, so it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've achieved over time counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be heeding the national trends and/or your home might have acquired equity before things settled down, so even when nationwide trends predict plummeting 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 tough thing to know. As appraisers, it's our job to understand the market dynamics of our area. At AppraisalsByDana, LLC., we're experts at pinpointing value trends in Atlanta, Fulton County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often cancel the PMI with little anxiety. At that time, the homeowner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |