Let Adams Appraisal Svcs. LLC help you learn if you can eliminate your PMI

When buying a house, a 20% down payment is usually the standard. The lender's risk is often only the remainder between the home value and the balance outstanding on the loan, so the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and regular value variations on the chance that a purchaser doesn't pay.

Lenders sometimes work with down payments dropping to 10, 5 and occasionally 0 percent. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added policy guards the lender in the event a borrower defaults on the loan and the market price of the house is lower 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 bundled into the mortgage payment and often isn't even tax deductible. It's profitable for the lender because they obtain the money, and they receive payment if the borrower doesn't pay, in contrast to a piggyback loan where the lender takes in all the damages.


Did you have less than 20% to put down on your mortgage? Call Adams Appraisal Svcs. LLC today at 303-745-5376. You may be able to cancel your Private Mortgage Insurance payment.

How home owners can keep from bearing the expense of PMI

 

With the implementation of The Homeowners Protection Act of 1998, lenders are required to automatically stop the PMI when the principal balance of the loan equals 78 percent of the primary loan amount on nearly all loans.

Savvy homeowners can get off the hook ahead of time. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount equals just 80 percent.

Since it can take several years to get to the point where the principal is only 80% of the original amount of the loan, it's important to know how your Colorado home has grown in value. After all, any appreciation you've achieved over time counts towards removing PMI.

The difficult thing for most consumers to determine is just when their home's equity goes over the 20% point. A certified, Colorado licensed real estate appraiser can certainly help. It is an appraiser's job to understand the market dynamics of their area.

At Adams Appraisal Svcs. LLC, we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often cancel the PMI with little trouble. At that time, the homeowner can enjoy the savings from that point on.

The money you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Adams Appraisal Svcs. LLC when it comes to appreciating values in Aurora and Arapahoe County. Contact us today.

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