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Mid-Ohio Appraisal Services can help you remove your Private Mortgage Insurance
It's generally known that a 20% down payment is the standard when getting a mortgage.
The lender's only liability is often just the remainder between the home value and the amount remaining on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, selling the home again, and typical value fluctuations in the event a purchaser is unable to pay.
The market was taking down payments discounted to 10, 5 and frequently 0 percent during the mortgage boom of the mid 2000s.
How does a lender endure the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI.
PMI takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the home is lower than the balance of the loan.
Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and on many occasions isn't even tax deductible, PMI is pricey to a borrower.
It's profitable for the lender because they obtain the money, and they are covered if the borrower defaults, as opposed to a piggyback loan where the lender consumes all the damages.
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The savings from dropping your PMI pays for the appraisal in no time. Mid-Ohio Appraisal Services are experts when it comes to value trends in the city of Columbus and Licking County. Contact us today.
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How can a home owner prevent paying PMI?
The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the primary loan amount.
Keen homeowners can get off the hook sooner than expected. The law promises that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent.
It can take several years to reach the point where the principal is just 80% of the original amount borrowed, so it's important to know how your Ohio home has appreciated in value.
After all, any appreciation you've achieved over time counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold?
Even when nationwide trends hint at lower overall home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home may have secured equity before things cooled off.
The difficult thing for most consumers to determine is just when their home's equity goes over the 20% point. An accredited, Ohio licensed real estate appraiser can surely help.
It is an appraiser's job to know the market dynamics of their area.
At Mid-Ohio Appraisal Services, we know when property values have risen or declined. We're experts at recognizing value trends in Columbus, Licking County, and surrounding areas.
When faced with information from an appraiser, the mortgage company will often remove the PMI with little effort. At that time, the homeowner can relish the savings from that point on.
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Did you secure your mortgage with less than 20% down? Call Mid-Ohio Appraisal Services today at (740) 522-0011. You may be able to get rid of your Private Mortgage Insurance premium.
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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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Today's Rates:
| 30-yr Fixed | 4.32% | 4.46% | | 15-yr Fixed | 3.83% | 4.03% | | 1-yr Adj | 3.5% | 4.34% |
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