Have equity in your home? Want a lower payment? An appraisal from Wolff Appraisals can help you get rid of your PMI.When buying a house, a 20% down payment is usually the standard. Considering the liability for the lender is usually only the remainder between the home value and the sum outstanding on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and regular value fluctuationsin the event a borrower doesn't pay. During the recent mortgage upturn of the last decade, it became widespread to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to handle the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplementary plan guards the lender in case a borrower defaults on the loan and the market price of the property is less than the loan balance. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the damages, PMI is money-making for the lender because they obtain the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers avoid bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute home owners can get off the hook beforehand. The law stipulates that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take countless years to reach the point where the principal is just 20% of the initial loan amount, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends hint at plummeting home values, be aware that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have gained equity before things simmered down. The hardest thing for most home owners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to know the market dynamics of our area. At Wolff Appraisals, we're masters at determining value trends in Winston Salem, Forsyth County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually do away with the PMI with little trouble. 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: |