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Let Aucilla River Appraisals (813)837-2009 help you determine if you can eliminate your PMI
When getting a mortgage, a 20% down payment is usually the standard.
The lender's liability is usually only the difference between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and natural value fluctuations in the event a purchaser defaults.
During the recent mortgage boom of the mid 2000s, it was customary to see lenders making deals with down payments of 10, 5 or even 0 percent.
A lender is able to manage the additional risk of the low down payment with Private Mortgage Insurance or PMI.
PMI covers the lender in the event a borrower defaults on the loan and the value of the house is lower than the loan balance.
Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI is pricey to a borrower.
It's favorable for the lender because they collect the money, and they get paid if the borrower doesn't pay, different from a piggyback loan where the lender absorbs all the costs.
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The savings from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Aucilla River Appraisals (813)837-2009 has years of experience with value trends in the city of Tampa and Hillsborough County. Contact us today.
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How can a homeowner avoid bearing the cost of PMI?
As a result of The Homeowners Protection Act of 1998, lenders are required to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount on most loans.
Acute home owners can get off the hook sooner than expected. The law promises that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent.
It can take a significant number of years to get to the point where the principal is just 80% of the original amount of the loan, so it's necessary to know how your Florida home has appreciated in value.
After all, all of the appreciation you've gained over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark?
Your neighborhood might not follow national trends and/or your home might have secured equity before the economy simmered down. So even when nationwide trends hint at a reduction in home values, you should realize that real estate is local.
The hardest thing for almost all consumers to determine is whether their home equity has exceeded the 20% point. A certified, Florida licensed real estate appraiser can surely help.
It's an appraiser's job to recognize the market dynamics of their area.
At Aucilla River Appraisals (813)837-2009, we know when property values have risen or declined. We're masters at analyzing value trends in Tampa, Hillsborough County, and surrounding areas.
Faced with information from an appraiser, the mortgage company will often do away with the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Aucilla River Appraisals (813)837-2009 is in the business of tracking value trends in Tampa and Hillsborough County. Contact us today.
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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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