We can help you remove your Private Mortgage InsuranceIt's generally inferred that a 20% down payment is accepted when purchasing a home. The lender's liability is generally only the difference between the home value and the amount due on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, reselling the home, and regular value changes in the event a borrower doesn't pay. During the recent mortgage boom of the last decade, it became common to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower defaults on the loan and the value of the property is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible, PMI is costly to a borrower. It's favorable for the lender because they secure the money, and they receive payment if the borrower doesn't pay, separate from a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers prevent bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law promises that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, acute homeowners can get off the hook sooner than expected. Since it can take countless years to reach the point where the principal is just 20% of the initial loan amount, it's essential to know how your home has increased in value. After all, all of the appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be heeding the national trends and/or your home may have secured equity before things settled down, so even when nationwide trends forecast falling home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. It's an appraiser's job to understand the market dynamics of their area. At Debra Hebert Appraisal Services, we know when property values have risen or declined. We're masters at identifying value trends in Metairie, Jefferson County and surrounding areas. When faced with data from an appraiser, the mortgage company will most often drop the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |