Let Advantage Appraisal, LLC help you determine if you can eliminate your PMI
A 20% down payment is typically the standard when buying a house.
The lender's only risk is typically just the remainder between the home value and the amount remaining on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and natural value variations on the chance that a borrower is unable to pay.
During the recent mortgage upturn that our country recently experienced, it was customary to see lenders making deals with down payments of 10, 5, 3 or often 0 percent.
How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI.
PMI guards the lender in case a borrower is unable to pay on the loan and the market price of the home is less than what is owed on the loan.
PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn't even tax deductible.
Separate from a piggyback loan where the lender takes in all the losses, PMI is money-making for the lender because they acquire the money, and they are covered if the borrower doesn't pay.
The amount you keep from getting rid of your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Advantage Appraisal, LLC when it comes to appreciating values in the city of Charles Town and Jefferson County. Contact us today.
How can home owners refrain from bearing the expense of PMI?
The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount.
The law pledges that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, acute home owners can get off the hook a little earlier.
Because it can take many years to get to the point where the principal is only 80% of the initial loan amount, it's crucial to know how your West Virginia home has grown in value.
After all, any appreciation you've accomplished over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark?
Even when nationwide trends predict falling home values, realize that real estate is local. Your neighborhood may not be following the national trends and/or your home may have gained equity before things simmered down.
The difficult thing for most people to figure out is just when their home's equity goes over the 20% point. An accredited, West Virginia licensed real estate appraiser can certainly help.
Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job!
At Advantage Appraisal, LLC, we're experts at identifying value trends in Charles Town, Jefferson County, and surrounding areas, and we know when property values have risen or declined.
When faced with figures from an appraiser, the mortgage company will usually remove the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
The amount you keep from dropping your PMI will make up for the price of the appraisal in a matter of months. Advantage Appraisal, LLC is in the business of tracking real estate value trends in Charles Town and Jefferson County. Contact us today.
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