Have equity in your home? Want a lower payment? An appraisal from Americana Valuations can help you get rid of your PMI.It's widely known that a 20% down payment is common when buying a house. The lender's risk is often only the difference between the home value and the sum due on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, reselling the home, and regular value changes in the event a borrower defaults. During the recent mortgage boom of the mid 2000s, it became common to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower defaults on the loan and the worth of the house is less than what the borrower still owes on the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and frequently isn't even tax deductible. Separate from a piggyback loan where the lender takes in all the losses, PMI is profitable for the lender because they collect the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law stipulates that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, keen home owners can get off the hook a little early. Considering it can take many years to get to the point where the principal is only 20% of the original loan amount, it's important to know how your home has appreciated in value. After all, any appreciation you've gained over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be minding the national trends and/or your home might have secured equity before things cooled off, so even when nationwide trends hint at declining home values, you should understand that real estate is local. The hardest thing for many homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to keep up with the market dynamics of their area. At Americana Valuations, we know when property values have risen or declined. We're experts at analyzing value trends in New Braunfels, Comal County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |