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Let Beresford Appraisals help you figure out if you can cancel your PMIWhen purchasing a home, a 20% down payment is usually the standard. The lender's liability is generally only the remainder between the home value and the amount outstanding on the loan, so the 20% provides a nice buffer against the costs of foreclosure, reselling the home, and natural value fluctuations on the chance that a purchaser is unable to pay.
During the recent mortgage upturn that our country recently experienced, it was widespread to see lenders only asking for down payments of 10, 5, 3 or even 0 percent. How does a lender endure the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower doesn't pay on the loan and the value of the property is less than what the borrower still owes on the loan.
PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible. Different from a piggyback loan where the lender consumes all the damages, PMI is favorable for the lender because they obtain the money, and they are covered if the borrower defaults.
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Does your monthly house payment have a lineitem for PMI? Call Beresford Appraisals today at 843.884.0505 or send us an e-mail. Documentation of your home's current value could save you thousands. |
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How can homeowners avoid paying PMI? With the passage of The Homeowners Protection Act of 1998, lenders are required to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount on nearly all loans. Acute home owners can get off the hook beforehand. The law guarantees that, at the request of the home owner, the PMI must be released 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 initial loan amount, so it's necessary to know how your South Carolina home has appreciated in value. After all, every bit of appreciation you've acquired over the years counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends signify decreasing home values, realize that real estate is local. Your neighborhood may not be following the national trends and/or your home may have acquired equity before things simmered down.
An accredited, South Carolina licensed real estate appraiser can help homeowners figure out if their equity has made it to the 20% point, as it's a hard thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Beresford Appraisals, we know when property values have risen or declined. We're masters at pinpointing value trends in Charleston, Charleston County, and surrounding areas. Faced with figures from an appraiser, the mortgage company will often remove the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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Has your real estate appreciated since you first purchased? Call Beresford Appraisals today at 843.884.0505. You may be able to cancel your Private Mortgage Insurance premium. |
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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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