Have equity in your home? Want a lower payment? An appraisal from Markham & Fox, LLC can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. The lender's liability is often only the difference between the home value and the amount due on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and typical value changes on the chance that a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or even 0 percent. A lender is able to endure the added risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI protects the lender if a borrower defaults on the loan and the worth of the house is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI is costly to a borrower. It's beneficial for the lender because they secure the money, and they get paid if the borrower is unable to pay, separate from a piggyback loan where the lender consumes all the deficits. 
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 paying PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law stipulates that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, savvy home owners can get off the hook sooner than expected. Because it can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, it's necessary to know how your home has appreciated in value. After all, any appreciation you've gained over the years counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends signify declining home values, understand that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home might have gained equity before things simmered down. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Markham & Fox, LLC, we're experts at determining value trends in Lynchburg, Lynchburg City 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 most often cancel the PMI with little anxiety. At which 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: |