Remove Your PMI - Private Mortgage Insurance
When purchasing a home, a 20% down payment is typically the standard. PMI protects the lender if a borrower doesn't pay on the loan and the market price of the house is less than the balance of the loan.
Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible, PMI can be costly to a borrower.
How Can a Homeowner Prevent the Cost of PMI?With the passage of The Homeowners Protection Act of 1998, lenders are forced to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount on most loans.
The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, savvy home owners can get off the hook sooner than expected.
It can take several years to arrive at the point where the principal is only 80% of the original loan amount, so it's important to know how your Arizona home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards dismissing PMI.
The toughest thing for many consumers to figure out is just when their home's equity goes over the 20% point.
An accredited, Arizona licensed real estate appraiser can definitely help.
Master Appraisal Services:
When faced with figures from an appraiser, the mortgage company will usually remove the PMI with little effort. At that time, the home owner can delight in the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link:
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