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Have equity in your home? Want a lower payment? An appraisal from APPRAISERSNC/CR&S Appraisal Services can help you get rid of your PMI.
When getting a mortgage, a 20% down payment is usually the standard.
The lender's liability is generally only the difference between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value fluctuations in the event a borrower is unable to pay.
During the recent mortgage boom that our country recently experienced, it was widespread to see lenders making deals with down payments of 10, 5, 3 or even 0 percent.
How does a lender manage the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI.
PMI protects the lender if a borrower doesn't pay on the loan and the value of the home is less than what is owed on the loan.
PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible.
It's advantageous for the lender because they acquire the money, and they get the money if the borrower is unable to pay, as opposed to a piggyback loan where the lender takes in all the losses.
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Has your real estate appreciated since you first purchased? Call APPRAISERSNC/CR&S Appraisal Services today at (919) 649-1294. You may be able to save money by removing your Private Mortgage Insurance payment.
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How can buyers refrain from bearing the cost of PMI?
As a result of The Homeowners Protection Act of 1998, lenders are required to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount on most loans.
Wise home owners can get off the hook beforehand. The law pledges that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent.
It can take a significant number of years to arrive at the point where the principal is only 80% of the original loan amount, so it's important to know how your North Carolina home has increased in value.
After all, any appreciation you've achieved over the years counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% mark?
Even when nationwide trends indicate lower overall home values, understand that real estate is local. Your neighborhood might not be minding the national trends and/or your home may have secured equity before things declined.
A certified, North Carolina licensed real estate appraiser can help homeowners figure out just when their home's equity rises above the 20% point, as it's a tough thing to know.
It's an appraiser's job to recognize the market dynamics of their area.
At APPRAISERSNC/CR&S Appraisal Services, we know when property values have risen or declined. We're masters at pinpointing value trends in RALEIGH, Wake County, and surrounding areas.
When faced with information from an appraiser, the mortgage company will often do away with the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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The savings from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Nobody is more qualified than APPRAISERSNC/CR&S Appraisal Services when it comes to appreciating values in RALEIGH and Wake 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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