Have equity in your home? Want a lower payment? An appraisal from Cooper Associates can help you get rid of your PMI.A 20% down payment is usually accepted when purchasing a home. The lender's liability is often only the difference between the home value and the sum due on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and regular value changes in the event a purchaser doesn't pay. The market was accepting down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower defaults on the loan and the market price of the home is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible, PMI can be costly to a borrower. It's lucrative for the lender because they acquire the money, and they receive payment if the borrower defaults, opposite from a piggyback loan where the lender takes in all the costs. 
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 keep from bearing the expense of PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Keen homeowners can get off the hook sooner than expected. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. Considering it can take many years to reach the point where the principal is only 20% of the original loan amount, it's necessary to know how your home has grown in value. After all, every bit of appreciation you've obtained over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home could have secured equity before things cooled off, so even when nationwide trends signify falling home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Cooper Associates, we know when property values have risen or declined. We're masters at identifying value trends in Picayune, Pearl River County and surrounding areas. Faced with information from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At that 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: |