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Corpus Christi Appraisal Service, Inc. can help you remove your Private Mortgage Insurance
When getting a mortgage, a 20% down payment is usually the standard.
Because the risk for the lender is oftentimes only the remainder between the home value and the amount due on the loan, the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and natural value variations on the chance that a borrower doesn't pay.
The market was taking down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s.
How does a lender endure the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI.
PMI protects the lender if a borrower defaults on the loan and the market price of the property is lower than the balance of 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 payment and on many occasions isn't even tax deductible.
It's advantageous for the lender because they obtain the money, and they get paid if the borrower defaults, as opposed to a piggyback loan where the lender takes in all the damages.
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Is PMI a lineitem in your monthly mortgage payment? Call Corpus Christi Appraisal Service, Inc. today at 3618805885 or send us an e-mail. A new appraisal could save you thousands.
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How can a home owner keep from bearing the cost of PMI?
The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount.
The law stipulates that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, savvy home owners can get off the hook a little earlier.
It can take many years to arrive at the point where the principal is just 80% of the original amount of the loan, so it's essential to know how your Texas home has grown in value.
After all, every bit of appreciation you've achieved over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold?
Your neighborhood may not conform to national trends and/or your home might have acquired equity before the economy declined. So even when nationwide trends hint at decreasing home values, you should realize that real estate is local.
The toughest thing for most homeowners to figure out is whether their home equity has exceeded the 20% point. An accredited, Texas licensed real estate appraiser can definitely help.
It's an appraiser's job to know the market dynamics of their area.
At Corpus Christi Appraisal Service, Inc., we're experts at identifying value trends in Corpus Christi, Nueces County, and surrounding areas, and we know when property values have risen or declined.
Faced with information from an appraiser, the mortgage company will generally drop the PMI with little effort. At that time, the home owner can relish the savings from that point on.
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Did you have less than 20% to put down on your mortgage? Contact Corpus Christi Appraisal Service, Inc. today at 3618805885. You may be able to cancel your Private Mortgage Insurance premium.
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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
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