Let American Home - Residential Appraisers, LLC help you decide if you can cancel your PMI
When buying a house, a 20% down payment is usually the standard.
The lender's only liability is generally just the difference between the home value and the balance remaining on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and typical value variations in the event a borrower is unable to pay.
During the recent mortgage boom that our country recently experienced, it was customary to see lenders only asking for down payments of 10, 5 or even 0 percent.
A lender is able to endure the increased risk of the low down payment with Private Mortgage Insurance or PMI.
This supplemental policy protects the lender if a borrower is unable to pay on the loan and the value of the home is less than the balance of the loan.
Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and frequently isn't even tax deductible, PMI can be expensive to a borrower.
It's money-making for the lender because they collect the money, and they get the money if the borrower is unable to pay, as opposed to a piggyback loan where the lender absorbs all the costs.
Does your monthly house payment include a fee PMI? Call American Home - Residential Appraisers, LLC today at (702) 644-6330 or send us an e-mail. Documentation of your home's present value could save you thousands.
How can home owners refrain from paying PMI?
With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount on most loans.
Savvy home owners can get off the hook beforehand. The law stipulates that, at the request of the home owner, the PMI must be released when the principal amount equals just 80 percent.
It can take a significant number of years to get to the point where the principal is only 80% of the initial amount of the loan, so it's crucial to know how your Nevada home has appreciated in value.
After all, every bit of appreciation you've gained over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark?
Your neighborhood might not follow national trends and/or your home may have gained equity before the economy declined. So even when nationwide trends hint at decreasing home values, you should know most importantly that real estate is local.
The toughest thing for most people to figure out is whether their home equity has exceeded the 20% point. A certified, Nevada licensed real estate appraiser can certainly help.
It is an appraiser's job to recognize the market dynamics of their area.
At American Home - Residential Appraisers, LLC, we know when property values have risen or declined. We're masters at determining value trends in Henderson, Clark County, and surrounding areas.
When faced with figures from an appraiser, the mortgage company will usually drop the PMI with little trouble. At that time, the home owner can retain the savings from that point on.
Did you secure your mortgage with less than 20% down? Contact American Home - Residential Appraisers, LLC today at (702) 644-6330. You may be able to save money by removing your Private Mortgage Insurance payment.
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