Have equity in your home? Want a lower payment? An appraisal from Tim Norris & Associates can help you get rid of your PMI.A 20% down payment is usually the standard when purchasing a home. The lender's liability is generally only the remainder between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value variations in the event a purchaser is unable to pay. The market was working with down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower defaults on the loan and the market price of the property is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be costly to a borrower. It's profitable for the lender because they obtain the money, and they receive payment if the borrower is unable to pay, different from a piggyback loan where the lender absorbs all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home owners can avoid paying PMIWith the utilization of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Wise home owners can get off the hook sooner than expected. The law pledges that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the initial loan amount, so it's essential to know how your home has appreciated in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home may have secured equity before things calmed down, so even when nationwide trends signify declining home values, you should understand 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 hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Tim Norris & Associates, we know when property values have risen or declined. We're masters at analyzing value trends in Huntertown, Allen County and surrounding areas. Faced with information from an appraiser, the mortgage company will often cancel 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: |