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Have equity in your home? Want a lower payment? An appraisal from Powers Appraisal Service can help you get rid of your PMI.
It's widely understood that a 20% down payment is common when purchasing a home.
Since the liability for the lender is often only the difference between the home value and the amount due on the loan, the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and natural value variations on the chance that a purchaser is unable to pay.
During the recent mortgage upturn of the mid 2000s, it became common to see lenders reducing down payments to 10, 5 or often 0 percent.
A lender is able to manage the added risk of the low down payment with Private Mortgage Insurance or PMI.
This additional policy guards the lender in case a borrower doesn't pay on the loan and the market price of the property is lower than the balance of the loan.
Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible, PMI can be costly to a borrower.
Unlike a piggyback loan where the lender consumes all the costs, PMI is beneficial for the lender because they secure the money, and they are covered if the borrower defaults.
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Does your monthly mortgage payment include a fee PMI? Call Powers Appraisal Service today at 6023161860 or send us an e-mail. Documentation of your home's present value could save you thousands.
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How can a homeowner prevent paying 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 initial loan amount on nearly all loans.
Acute home owners can get off the hook a little early. The law pledges that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent.
Because it can take several years to arrive at the point where the principal is only 80% of the original amount borrowed, it's important to know how your Arizona home has appreciated in value.
After all, any appreciation you've gained over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold?
Even when nationwide trends hint at falling home values, realize that real estate is local. Your neighborhood might not be following the national trends and/or your home might have acquired equity before things simmered down.
The toughest thing for most people to figure out is whether their home equity has exceeded the 20% point. A certified, Arizona licensed real estate appraiser can surely help.
It is an appraiser's job to recognize the market dynamics of their area.
At Powers Appraisal Service, we know when property values have risen or declined. We're experts at identifying value trends in Scottsdale, Maricopa County, and surrounding areas.
When faced with figures from an appraiser, the mortgage company will most often drop the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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The savings from dropping your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Powers Appraisal Service when it comes to appreciating values in Scottsdale and Maricopa 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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