ASC Professionals, LLC can help you remove your Private Mortgage InsuranceIt's generally known that a 20% down payment is the standard when purchasing a home. The lender's liability is generally only the difference between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, reselling the home, and regular value changes in the event a purchaser defaults.
The market was accepting down payments discounted to 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower doesn't pay on the loan and the value of the home is less than what the borrower still owes on the loan.
Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and on many occasions isn't even tax deductible, PMI is pricey to a borrower. It's money-making for the lender because they acquire the money, and they are covered if the borrower doesn't pay, separate from a piggyback loan where the lender consumes all the costs.
|Has your home value appreciated since you first purchased? Contact ASC Professionals, LLC today at (404)424-4747. You may be able to get rid of your Private Mortgage Insurance premium.|
How home buyers can refrain from bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount on nearly all loans. The law states that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, savvy homeowners can get off the hook ahead of time.
It can take several years to get to the point where the principal is only 80% of the initial amount borrowed, so it's necessary to know how your Georgia home has grown in value. After all, every bit of appreciation you've gained over time counts towards dismissing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Your neighborhood might not follow national trends and/or your home could have gained equity before the economy simmered down. So even when nationwide trends predict a reduction in home values, you should understand that real estate is local.
The hardest thing for almost all people to figure out is whether their home equity has exceeded the 20% point. A certified, Georgia licensed real estate appraiser can surely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At ASC Professionals, LLC, we're experts at identifying value trends in Acworth, Cobb County, and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will generally eliminate the PMI with little anxiety. At that time, the homeowner can retain the savings from that point on.
|Is PMI a lineitem in your monthly mortgage payment? Call ASC Professionals, LLC today at (404)424-4747 or send us an e-mail. Documentation of your home's present value could save you thousands.|
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