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Paschall Appraisals can help you remove your Private Mortgage Insurance
A 20% down payment is typically the standard when purchasing a home.
Since the liability for the lender is often only the difference between the home value and the amount remaining on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and natural value changes in the event a borrower doesn't pay.
Banks were taking down payments discounted to 10, 5 and often 0 percent in the peak of last decade's mortgage boom.
A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI.
This added plan takes care of the lender in case a borrower defaults on the loan and the value of the house is lower than what is owed on the loan.
Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI can be pricey to a borrower.
Unlike a piggyback loan where the lender consumes all the costs, PMI is favorable for the lender because they acquire the money, and they get paid if the borrower doesn't pay.
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The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Paschall Appraisals has years of experience with value trends in the city of Trenton and Gibson County. Contact us today.
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How buyers can prevent paying PMI
With the implementation of The Homeowners Protection Act of 1998, lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount on most loans.
The law promises that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. So, acute home owners can get off the hook sooner than expected.
Since it can take a significant number of years to reach the point where the principal is only 80% of the original loan amount, it's essential to know how your Tennessee home has grown in value.
After all, every bit of appreciation you've gained over the years counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark?
Your neighborhood may not follow national trends and/or your home may have secured equity before things simmered down. So even when nationwide trends hint at a reduction in home values, you should realize that real estate is local.
An accredited, Tennessee licensed real estate appraiser can help home owners figure out if their equity has exceeed 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 Paschall Appraisals, we're experts at identifying value trends in Trenton, Gibson County, and surrounding areas, and we know when property values have risen or declined.
When faced with information from an appraiser, the mortgage company will often eliminate the PMI with little trouble. At that time, the homeowner can enjoy the savings from that point on.
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Did you have less than 20% to put down on your mortgage? Contact Paschall Appraisals today at 731-855-3999 to see if you can get rid of your Private Mortgage Insurance payment.
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Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year
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