Have equity in your home? Want a lower payment? An appraisal from TSH Real Estate and Appraisal Services, LLC can help you get rid of your PMI.It's typically known that a 20% down payment is accepted when getting a mortgage. Considering the liability for the lender is usually only the difference between the home value and the amount due on the loan, the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and regular value variationsin the event a purchaser defaults. During the recent mortgage upturn of the last decade, it became customary to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender endure the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower is unable to pay on the loan and the market price of the home is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and generally isn't even tax deductible, PMI is costly to a borrower. Opposite from a piggyback loan where the lender absorbs all the costs, PMI is lucrative for the lender because they secure the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can keep from bearing the expense of PMIThe 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 original loan amount. The law designates that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, wise home owners can get off the hook a little early. Considering it can take countless years to arrive at the point where the principal is only 20% of the initial loan amount, it's necessary to know how your home has grown in value. After all, any appreciation you've obtained over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not be minding the national trends and/or your home could have secured equity before things simmered down, so even when nationwide trends indicate declining home values, you should realize that real estate is local. The difficult thing for many home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It is an appraiser's job to recognize the market dynamics of their area. At TSH Real Estate and Appraisal Services, LLC, we're experts at identifying value trends in Kaneohe, Honolulu County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |