Have equity in your home? Want a lower payment? An appraisal from Slater Real Estate Services can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. Since the risk for the lender is generally only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and natural value fluctuationson the chance that a borrower doesn't pay. During the recent mortgage upturn of the last decade, it became customary to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to endure the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI covers the lender if a borrower doesn't pay on the loan and the worth of the house is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible, PMI is pricey to a borrower. It's lucrative for the lender because they acquire the money, and they get the money if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer refrain from bearing the expense of PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Keen home owners can get off the hook a little early. The law stipulates that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. Since it can take countless years to get to the point where the principal is just 20% of the original loan amount, it's necessary to know how your home has appreciated in value. After all, any appreciation you've acquired over the years counts towards dismissing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not be heeding the national trends and/or your home may have acquired equity before things simmered down, so even when nationwide trends forecast plummeting home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help home owners 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 Slater Real Estate Services, we're masters at recognizing value trends in Windsor, Weld County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will usually drop the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |