Have equity in your home? Want a lower payment? An appraisal from BOGRIS APPRAISAL LLC can help you get rid of your PMI.
When buying a house, a 20% down payment is typically the standard.
Because the liability for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and natural value changes in the event a purchaser is unable to pay.
During the recent mortgage upturn of the last decade, it was widespread to see lenders making deals with down payments of 10, 5, 3 or often 0 percent.
How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI.
PMI guards the lender in case a borrower is unable to pay on the loan and the value of the property is lower than what the borrower still owes on the loan.
Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible, PMI can be expensive to a borrower.
Different from a piggyback loan where the lender absorbs all the losses, PMI is lucrative for the lender because they acquire the money, and they are covered if the borrower doesn't pay.
Did you secure your mortgage with less than 20% down? Call BOGRIS APPRAISAL LLC today at (201) 773-3282 to see if you can cancel your Private Mortgage Insurance premium.
How can a buyer keep from paying PMI?
As a result of The Homeowners Protection Act of 1998, lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount on nearly all loans.
Wise homeowners can get off the hook a little earlier. The law states that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent.
It can take several years to get to the point where the principal is only 80% of the initial amount borrowed, so it's important to know how your New Jersey home has grown in value.
After all, all of the appreciation you've accomplished over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark?
Your neighborhood might not adhere to national trends and/or your home may have secured equity before the economy declined. So even when nationwide trends forecast decreasing home values, you should realize that real estate is local.
An accredited, New Jersey licensed real estate appraiser can help home owners figure out if their equity has reached the 20% point, as it's a hard thing to know.
As appraisers, it's our job to recognize the market dynamics of our area.
At BOGRIS APPRAISAL LLC, we know when property values have risen or declined. We're experts at identifying value trends in Fair Lawn, Bergen County, and surrounding areas.
Faced with data from an appraiser, the mortgage company will usually drop the PMI with little effort. At which time, the home owner can retain the savings from that point on.
Has your home value appreciated since you first purchased? Call BOGRIS APPRAISAL LLC today at (201) 773-3282 to see if you can cancel your Private Mortgage Insurance payment.
Want to learn more about PMI and the Homeowners Protection Act? Click this link:
