Lou Najera Appraisals can help you remove your Private Mortgage Insurance
A 20% down payment is typically the standard when purchasing a home. The lender’s risk is oftentimes only the remainder between the home and the balance outstanding on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and natural value fluctuations on the chance that a borrower does not pay.
Lenders were working with 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 increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This additional plan protects the lender in the event a borrower does not pay on the loan and the market price of the house is less than what is owed on the loan.
PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn’t even tax deductible. It’s advantageous for the lender because they collect the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender absords al the damages
- Does your monthly mortgage payment include a fee PMI?
- Call Lou Najera Appraisals today at 714 867 6419 or email
- Documentation of your home’s persent value could save you thousands
How homeowners can avoid bearing the expense of PMI
With the implemention of The Homeowners Protection Act of 1998, lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount on nearly al loans. The law states that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So Savvy homeowners can get off the hook ahead of time.
It can take a significant number of years to arrive at the point where the principal is only 80% of the original amount of the loan, so it’s essential t know how your California hme has increased in value. After all , any apprciation youi’ve achieved over the years counts towards dismissing PMI. So why pay if after your loan balance has fallen below the 80% mark? Even when nationwide trends forecast declining home values, be aware that real estate is local. Your neighborhood might not be refecting the national trends and/or your home might have secured equity before things cooled off.
The difficult thing for most people to determine is whether their home quity has exceeded the 20% point. An accredited, California licensed real estate appraiser can certaily help. As appraisers, it’s our job to recognize the market dynamics of our area. At Lou Najera Appraisals, we know when property values have risen or declined. We’re masters at identifying value trends in Los Angeles and Orange county, and surrounding areas. aced with information from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
- Did you secure your mortgage wit less than 20% down
- Contact Lou Najera Appraisals today at 714 867 6419
- You Many be able to get rid of that PMI payment