Have equity in your home? Want a lower payment? An appraisal from Routt County Appraisers can help you get rid of your PMI.It's typically known that a 20% down payment is accepted when purchasing a home. Because the risk for the lender is generally only the difference between the home value and the amount remaining on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and natural value variationsin the event a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders taking down payments of 10, 5 or even 0 percent. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI covers the lender if a borrower defaults on the loan and the market price of the home is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and generally isn't even tax deductible, PMI can be expensive to a borrower. Contradictory to a piggyback loan where the lender absorbs all the costs, PMI is profitable for the lender because they acquire the money, and they get paid 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 can a home owner keep from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute homeowners can get off the hook a little early. The law promises that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. It can take countless years to reach the point where the principal is only 20% of the initial loan amount, so it's crucial 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 the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends predict declining home values, understand that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have acquired equity before things cooled off. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It's an appraiser's job to know the market dynamics of their area. At Routt County Appraisers, we know when property values have risen or declined. We're experts at recognizing value trends in Steamboat Springs, Routt County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |