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MANDERFIELD APPRAISAL GROUP can help you remove your Private Mortgage Insurance
When getting a mortgage, a 20% down payment is typically the standard.
Since the risk for the lender is generally only the remainder between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and typical value fluctuations on the chance that a purchaser doesn't pay.
During the recent mortgage upturn of the last decade, it was common to see lenders only asking for down payments of 10, 5 or sometimes 0 percent.
A lender is able to endure the increased risk of the minimal down payment with Private Mortgage Insurance or PMI.
This supplementary plan takes care of the lender if a borrower doesn't pay on the loan and the market price of the property is less than the loan balance.
PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and on many occasions isn't even tax deductible.
Instead of a piggyback loan where the lender absorbs all the losses, PMI is lucrative for the lender because they secure the money, and they get the money if the borrower defaults.
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Has your home value appreciated since you first purchased? Call MANDERFIELD APPRAISAL GROUP today at 703-751-7888. You may be able to save money by removing your Private Mortgage Insurance payment.
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How can a buyer avoid bearing the cost of PMI?
With the passage of The Homeowners Protection Act of 1998, lenders are forced to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount on nearly all loans.
The law pledges that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. So, acute home owners can get off the hook sooner than expected.
It can take a significant number of years to reach the point where the principal is just 80% of the original amount of the loan, so it's crucial to know how your Virginia home has appreciated in value.
After all, all of the appreciation you've acquired over time counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold?
Your neighborhood may not adhere to national trends and/or your home could have secured equity before the economy cooled off. So even when nationwide trends signify declining home values, you should realize that real estate is local.
The hardest thing for many people to figure out is just when their home's equity rises above the 20% point. A certified, Virginia licensed real estate appraiser can definitely help.
Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job!
At MANDERFIELD APPRAISAL GROUP, we're experts at determining value trends in Alexandria, Alexandria City 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 drop the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.
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The savings from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Nobody is more qualified than MANDERFIELD APPRAISAL GROUP when it comes to appreciating values in Alexandria and Alexandria City County. Contact us today.
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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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