Have equity in your home? Want a lower payment? An appraisal from Jordan Services can help you get rid of your PMI.A 20% down payment is typically accepted when purchasing a home. Considering the liability for the lender is usually only the remainder between the home value and the amount due on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and natural value fluctuationsin the event a purchaser doesn't pay. Banks were working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender endure the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower defaults on the loan and the value of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender takes in all the deficits, PMI is lucrative 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 home owners keep from paying PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Smart homeowners can get off the hook a little earlier. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. It can take countless years to get to the point where the principal is just 20% of the original amount borrowed, so it's crucial to know how your home has grown in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends hint at plunging home values, realize that real estate is local. Your neighborhood might not be following the national trends and/or your home might have secured equity before things settled down. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Jordan Services, we know when property values have risen or declined. We're experts at determining value trends in Lufkin, Angelina County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually do away with the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |