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Triangle Appraisal, Ltd. can help you remove your Private Mortgage Insurance
When buying a house, a 20% down payment is typically the standard.
The lender's risk is usually only the difference between the home value and the sum due on the loan, so the 20% provides a nice cushion against the expenses of foreclosure, selling the home again, and typical value changes in the event a purchaser defaults.
During the recent mortgage boom of the last decade, it became common to see lenders reducing down payments to 10, 5, 3 or often 0 percent.
A lender is able to handle the added risk of the minimal down payment with Private Mortgage Insurance or PMI.
This additional plan guards the lender in the event a borrower defaults on the loan and the market price of the property is less than the balance of the loan.
Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower.
It's lucrative for the lender because they secure the money, and they get paid if the borrower doesn't pay, as opposed to a piggyback loan where the lender consumes all the damages.
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Did you have less than 20% to put down on your mortgage? Call Triangle Appraisal, Ltd. today at 708-430-0218. You may be able to cancel your Private Mortgage Insurance premium.
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How can a home owner prevent bearing the cost of PMI?
As a result of The Homeowners Protection Act of 1998, lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount on nearly all loans.
Smart home owners can get off the hook ahead of time. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent.
Considering it can take several years to reach the point where the principal is only 80% of the initial amount borrowed, it's essential to know how your Illinois home has appreciated in value.
After all, every bit of appreciation you've acquired over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark?
Your neighborhood might not conform to national trends and/or your home may have secured equity before things declined. So even when nationwide trends hint at a reduction in home values, you should realize that real estate is local.
A certified, Illinois licensed real estate appraiser can help homeowners figure out just when their home's equity goes over the 20% point, as it's a difficult thing to know.
It is an appraiser's job to understand the market dynamics of their area.
At Triangle Appraisal, Ltd., we know when property values have risen or declined. We're experts at identifying value trends in Hickory Hills, Cook County, and surrounding areas.
When faced with information from an appraiser, the mortgage company will often remove the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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Does your monthly house payment have a lineitem for PMI? Call Triangle Appraisal, Ltd. today at 708-430-0218 or send us an e-mail. A current appraisal could save you thousands.
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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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