Cadore Appraisal Group, LLC can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is typically the standard. The lender's risk is often only the remainder between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and regular value variations on the chance that a borrower defaults. During the recent mortgage upturn of the last decade, it was common to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to handle the additional risk of the small down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower doesn't pay on the loan and the market price of the property is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be costly to a borrower. It's profitable for the lender because they secure the money, and they get paid if the borrower doesn't 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 home buyer refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Keen homeowners can get off the hook a little earlier. The law stipulates that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. Because it can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, it's important to know how your home has grown in value. After all, all of the appreciation you've obtained over the years counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be adhering to the national trends and/or your home could have gained equity before things calmed down, so even when nationwide trends forecast decreasing home values, you should realize that real estate is local. The hardest thing for most home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At Cadore Appraisal Group, LLC, we're experts at recognizing value trends in Seymour, New Haven 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 cancel the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |