Have equity in your home? Want a lower payment? An appraisal from Carmouche Appraisal Services can help you get rid of your PMI.A 20% down payment is typically accepted when getting a mortgage. Since the risk for the lender is usually only the remainder between the home value and the amount due on the loan, the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and regular value changesin the event a purchaser doesn't pay. Lenders were accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender endure the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower defaults on the loan and the worth of the house is less than the balance of the loan. PMI is costly to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. It's advantageous for the lender because they obtain the money, and they get the money if the borrower doesn't pay, opposite from a piggyback loan where the lender consumes 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 buyers keep from bearing the expense of PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, wise homeowners can get off the hook sooner than expected. It can take countless years to reach the point where the principal is just 20% of the original amount of the loan, so it's important to know how your 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 signify declining home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have gained equity before things calmed down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to know the market dynamics of their area. At Carmouche Appraisal Services, we're masters at analyzing value trends in Orleans and Jefferson Parish and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |