Have equity in your home? Want a lower payment? An appraisal from Timothy M Tallent can help you get rid of your PMI.It's generally inferred that a 20% down payment is the standard when buying a house. Because the liability for the lender is usually only the difference between the home value and the amount due on the loan, the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and natural value fluctuations in the event a borrower defaults.Lenders were accepting down payments dropping to 10, 5 and frequently 0 percent during the mortgage boom of the last decade. A lender is able to handle the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower doesn't pay on the loan and the market price of the house is less than the balance of the loan. PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible. Different from a piggyback loan where the lender absorbs all the costs, PMI is advantageous for the lender because they collect the money, and they receive payment if the borrower doesn't pay.
How homebuyers can avoid bearing the cost of PMIWith the passage of The Homeowners Protection Act of 1998, lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount on nearly all loans. The law pledges that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, savvy homeowners can get off the hook a little early.Because it can take a significant number of years to arrive at the point where the principal is just 80% of the initial loan amount, it's essential to know how your Georgia home has appreciated in value. After all, every bit of appreciation you've achieved over time counts towards dismissing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not follow national trends and/or your home may have secured equity before things declined. So even when nationwide trends hint at a reduction in home values, you should understand that real estate is local. The difficult thing for many homeowners to determine is whether their home equity has exceeded the 20% point. A certified, Georgia licensed real estate appraiser can definitely help. It is an appraiser's job to keep up with the market dynamics of their area. At Timothy M Tallent, we know when property values have risen or declined. We're experts at determining value trends in Lilburn, Gwinnett County, and surrounding areas. When faced with figures from an appraiser, the mortgage company will often remove the PMI with little effort. At that time, the homeowner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year
|
||||||||||||||||||
