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Let Crescent Appraisal Group, Inc. help you discover if you can get rid of your PMI
It's generally understood that a 20% down payment is common when purchasing a home.
Because the risk for the lender is generally only the remainder between the home value and the sum due on the loan, the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and natural value variations in the event a borrower defaults.
Lenders were taking down payments dropping to 10, 5 and often 0 percent during the mortgage boom of the last decade.
How does a lender endure the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI.
PMI covers the lender in the event a borrower doesn't pay on the loan and the value of the house is less than the balance of the loan.
PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible.
It's profitable for the lender because they acquire the money, and they get the money if the borrower is unable to pay, unlike a piggyback loan where the lender consumes all the costs.
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Does your monthly mortgage payment have a lineitem for PMI? Call Crescent Appraisal Group, Inc. today at 504-887-7025 or send us an e-mail. A current appraisal could save you thousands.
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How homeowners can keep from bearing the cost of PMI
The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount.
The law designates that, at the request of the home owner, the PMI must be released when the principal amount equals only 80 percent. So, keen home owners can get off the hook sooner than expected.
Since 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, it's essential to know how your Louisiana home has grown in value.
After all, all of the appreciation you've achieved over time counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold?
Even when nationwide trends indicate declining home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home could have secured equity before things declined.
An accredited, Louisiana licensed real estate appraiser can help home owners figure out just when their home's equity goes over the 20% point, as it's a hard thing to know.
As appraisers, it's our job to recognize the market dynamics of our area.
At Crescent Appraisal Group, Inc., we know when property values have risen or declined. We're experts at recognizing value trends in Metairie, Jefferson County, and surrounding areas.
Faced with data from an appraiser, the mortgage company will usually cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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Did you secure your mortgage with less than 20% down? Contact Crescent Appraisal Group, Inc. today at 504-887-7025 to see if you can cancel your Private Mortgage Insurance payment.
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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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Crescent Appraisal Group, Inc. P.O. Box 7501 Metairie, LA 70010-7501
Phone: (504)887-7025 - Toll Free Fax: (866)632-4317 - Alternative Fax: (504)887-7760 E-mail: info@crescentappraisal.net
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