DANIEL I KANDEL can help you remove your Private Mortgage Insurance
When purchasing a home, a 20% down payment is usually the standard. Since the risk for the lender is often only the difference between the home value and the sum remaining on the loan, the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and natural value fluctuationsin the event a purchaser is unable to pay.
The market was accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplemental plan protects the lender in case a borrower doesn't pay on the loan and the worth of the home is lower 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 often isn't even tax deductible. It's lucrative for the lender because they secure the money, and they receive payment if the borrower defaults, contradictory to a piggyback loan where the lender takes in all the damages.
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.
How can home owners keep from bearing the cost of PMI?
The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Savvy home owners can get off the hook a little early. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent.
Since it can take countless years to get to the point where the principal is just 20% of the initial amount of the loan, it's essential to know how your home has increased in value. After all, any appreciation you've accomplished 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 may not be adopting the national trends and/or your home could have secured equity before things calmed down, so even when nationwide trends hint at plunging home values, you should realize that real estate is local.
An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to understand the market dynamics of our area. At DANIEL I KANDEL, we know when property values have risen or declined. We're masters at recognizing value trends in Weston/Ft. Lauderdale, Broward County and surrounding areas. When faced with information from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At that time, the home owner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: