Have equity in your home? Want a lower payment? An appraisal from Lambeau Real Estate Consulting, LLC can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. The lender's risk is often only the remainder between the home value and the amount due on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and typical value fluctuations on the chance that a borrower doesn't pay. Lenders were taking down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender if a borrower is unable to pay on the loan and the value of the home is lower than the loan balance. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible. It's beneficial for the lender because they obtain the money, and they get the money if the borrower doesn't pay, separate from a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer prevent paying PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Smart home owners can get off the hook a little early. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take countless years to get to the point where the principal is just 20% of the initial amount borrowed, so it's important to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home may have acquired equity before things settled down, so even when nationwide trends signify plummeting home values, you should realize that real estate is local. The toughest thing for almost all home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. It's an appraiser's job to keep up with the market dynamics of their area. At Lambeau Real Estate Consulting, LLC, we're experts at identifying value trends in East Bethel, Anoka 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 generally remove the PMI with little anxiety. At which 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: |