Have equity in your home? Want a lower payment? An appraisal from Chuck Roberts & Associates can help you get rid of your PMI.When purchasing a home, a 20% down payment is usually the standard. Because the risk for the lender is often only the difference between the home value and the sum remaining on the loan, the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and natural value fluctuationson the chance that a borrower doesn't pay. Lenders were accepting down payments as low as 10, 5 and even 0 percent during the mortgage boom of the last decade. A lender is able to handle the additional risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary plan protects the lender if a borrower is unable to pay on the loan and the value 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 compiled into the mortgage monthly payment and often isn't even tax deductible, PMI is costly to a borrower. Unlike a piggyback loan where the lender takes in all the deficits, PMI is favorable for the lender because they secure the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can prevent bearing the cost of PMIThe Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law guarantees that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, savvy homeowners can get off the hook ahead of time. It can take many years to get to the point where the principal is just 20% of the initial amount borrowed, so it's crucial to know how your home has grown in value. After all, every bit of appreciation you've gained over the years counts towards dismissing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things settled down, so even when nationwide trends forecast declining home values, you should understand that real estate is local. The toughest thing for many home owners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At Chuck Roberts & Associates, we know when property values have risen or declined. We're masters at determining value trends in Thousand Oaks, Ventura County and surrounding areas. When faced with figures from an appraiser, the mortgage company will most often do away with the PMI with little effort. At that time, the homeowner can retain the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |