|
|
|
|
Have equity in your home? Want a lower payment? An appraisal from Tim Norris & Associates can help you get rid of your PMI.
A 20% down payment is usually the standard when buying a house.
Considering the liability for the lender is often only the difference between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value changes on the chance that a borrower is unable to pay.
The market was accepting down payments dropping to 10, 5 and even 0 percent in the peak of last decade's mortgage boom.
A lender is able to endure the added risk of the low down payment with Private Mortgage Insurance or PMI.
PMI protects the lender if a borrower doesn't pay on the loan and the market price of the property is less than the balance of the loan.
PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible.
As opposed to a piggyback loan where the lender consumes all the losses, PMI is profitable for the lender because they collect the money, and they get paid if the borrower defaults.
 |
 |
 |
Did you have less than 20% to put down on your mortgage? Call Tim Norris & Associates today at 260 471-1061 to see if you can save money by removing your Private Mortgage Insurance premium.
|
|
|
How can a home buyer keep from bearing the cost of PMI?
With the implementation 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 initial loan amount on most loans.
Savvy homeowners can get off the hook a little earlier. The law pledges that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent.
Since it can take a significant number of years to arrive at the point where the principal is only 80% of the initial amount of the loan, it's crucial to know how your Indiana home has grown in value.
After all, any appreciation you've achieved over time counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold?
Even when nationwide trends forecast declining home values, understand that real estate is local. Your neighborhood may not be following the national trends and/or your home may have acquired equity before things cooled off.
The difficult thing for almost all consumers to determine is whether their home equity has exceeded the 20% point. A certified, Indiana licensed real estate appraiser can certainly help.
As appraisers, it's our job to keep up with the market dynamics of our area.
At Tim Norris & Associates, we're masters at determining value trends in Fort Wayne, Allen County, and surrounding areas, and we know when property values have risen or declined.
Faced with information from an appraiser, the mortgage company will most often cancel the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.
|
|
|
The savings from getting rid of your PMI will make up for the cost of the appraisal in no time. Tim Norris & Associates has years of experience with real estate value trends in Fort Wayne and Allen County. Contact us today.
|
|
|
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
|
|
|
|