McGuire Appraisals LLC can help you remove your Private Mortgage InsuranceA 20% down payment is usually the standard when purchasing a home. The lender's liability is often only the difference between the home value and the sum remaining on the loan, so the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and typical value variations in the event a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to endure the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This additional policy protects the lender in case a borrower is unable to pay on the loan and the market price of the home is lower than what is owed on the loan. PMI can be pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the costs, PMI is money-making for the lender because they secure the money, and they get paid 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 homebuyer prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Keen homeowners can get off the hook a little early. The law guarantees that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take many years to reach the point where the principal is only 20% of the original loan amount, so it's important to know how your home has grown in value. After all, every bit of appreciation you've gained over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be adopting the national trends and/or your home could have gained equity before things settled down, so even when nationwide trends forecast declining 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 difficult thing to know. As appraisers, it's our job to know the market dynamics of our area. At McGuire Appraisals LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Fort Smith, Sebastian County and surrounding areas. When faced with figures from an appraiser, the mortgage company will often do away with the PMI with little trouble. At that 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: |