Let Halpin Appraisal (843)341-5022 help you figure out if you can eliminate your PMI

A 20% down payment is usually the standard when purchasing a home. Considering the liability for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and typical value fluctuations on the chance that a purchaser defaults.

The market was taking down payments dropping to 10, 5 and often 0 percent during the mortgage boom of the last decade. A lender is able to handle the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender if a borrower doesn't pay on the loan and the market price of the house is less than what the borrower still owes on the loan.

PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and often isn't even tax deductible. It's beneficial for the lender because they secure the money, and they get the money if the borrower is unable to pay, in contrast to a piggyback loan where the lender absorbs all the losses.


Is PMI included in your monthly house payment? Call Halpin Appraisal (843)341-5022 today at 8433415022 or send us an e-mail. Documentation of your home's current value could save you thousands.

How can home owners prevent bearing the cost of PMI?

The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law pledges that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, savvy homeowners can get off the hook a little earlier.

It can take a significant number of years to arrive at the point where the principal is just 80% of the original loan amount, so it's crucial to know how your South Carolina home has increased in value. After all, all of the appreciation you've acquired over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not adhere to national trends and/or your home may have secured equity before things simmered down. So even when nationwide trends predict declining home values, you should realize that real estate is local.

The hardest thing for many people to determine is just when their home's equity goes over the 20% point. A certified, South Carolina licensed real estate appraiser can definitely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Halpin Appraisal (843)341-5022, we're experts at recognizing value trends in Hilton Head Island, Beaufort County, and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will usually do away with the PMI with little effort. At which time, the home owner can relish the savings from that point on.


Has your home value appreciated since you first purchased? Contact Halpin Appraisal (843)341-5022 today at 8433415022. You may be able to save money by removing your Private Mortgage Insurance premium.

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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