How To Remove Your PMI (Private Mortgage Insurance)

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How to remove your Private Mortage Insurance (PMI)?

You can remove your PMI (Private Mortgage Insurance) if you can show the bank that you have 20% or more equity. A Home Appraisal can help lower your payment! Would you like to save money by not having to pay for Private Mortgage Insurance? Simply fill out the form to the right for a free quote on fee and turn time, with no obligation. We guarantee your privacy. Did you have less than 20% to put down on your home? Contact Home Appraisals, Inc. today at 866-533-7173 to get an appraisal and see if you now have more than 20% equity.

Have equity in your home? Want a lower payment?

An appraisal from Home Appraisals, Inc. can help you remove your PMI. When buying a house, a 20% down payment is usually the standard. The lender’s only exposure is usually just the difference between the home value and the amount remaining on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, reselling the home, and natural value fluctuations in the event a purchaser is unable to pay.

Banks were accepting down payments as low as 10, 5 and even 0 percent in the peak of last decade’s mortgage boom. How does a lender endure the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the value of the home is lower than what is owed on the loan.

Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn’t even tax deductible, PMI can be pricey to a borrower. It’s lucrative for the lender because they obtain the money, and they are covered if the borrower doesn’t pay, as opposed to a piggyback loan where the lender takes in all the costs.

The amount you keep from cancelling your PMI will make up for the cost of the appraisal in no time. Home Appraisals, Inc. has years of experience with value trends. Contact us today.

How homeowners can remove PMI?

The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute homeowners can get off the hook a little earlier. The law stipulates that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent.

It can take several years to get to the point where the principal is just 80% of the initial amount borrowed, so it’s necessary to know how your  home has appreciated in value. After all, every bit of appreciation you’ve obtained over time counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Your neighborhood may not conform to national trends and/or your home might have secured equity before things simmered down. So even when nationwide trends indicate declining home values, you should know most importantly that real estate is local.

The hardest thing for almost all consumers to determine is whether their home equity has exceeded the 20% point. An accredited, certified or licensed real estate appraiser can surely help. Market dynamics and neighborhood-specific pricing trends are an appraiser’s primary job! At Home Appraisals, Inc., we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little effort. At which time, the homeowner can relish the savings from that point on.

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