Fort Neck Real Estate Appraisal, Inc. can help you remove your Private Mortgage Insurance
A 20% down payment is typically the standard when purchasing a home. Because the risk for the lender is oftentimes only the difference between the home value and the amount remaining on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value variations on the chance that a borrower is unable to pay.
During the recent mortgage upturn of the last decade, it became customary to see lenders making deals with down payments of 10, 5, 3 or sometimes 0 percent. How does a lender manage the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added policy covers the lender in the event a borrower defaults on the loan and the worth of the property is less than the balance of the loan.
PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and on many occasions isn't even tax deductible. It's favorable for the lender because they secure the money, and they receive payment if the borrower is unable to pay, in contrast to a piggyback loan where the lender takes in all the costs.
Did you have less than 20% to put down on your mortgage? Contact Fort Neck Real Estate Appraisal, Inc. today at (516) 221-2510 to see if you can cancel your Private Mortgage Insurance premium.
How can a homeowner prevent bearing the expense of PMI?
With the implementation of The Homeowners Protection Act of 1998, lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount on nearly all loans. Wise home owners can get off the hook sooner than expected. The law designates that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent.
It can take many years to arrive at the point where the principal is just 80% of the original amount borrowed, so it's important to know how your New York home has increased in value. After all, all of the appreciation you've accomplished over the years counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends forecast lower overall home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home may have gained equity before things simmered down.
The difficult thing for most homeowners to figure out is just when their home's equity goes over if their home equity has exceeded the 20% point. A certified, New York licensed real estate appraiser can surely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Fort Neck Real Estate Appraisal, Inc., we're experts at pinpointing value trends in Seaford, Nassau County, and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally drop the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
Has your home value appreciated since you first purchased? Contact Fort Neck Real Estate Appraisal, Inc. today at (516) 221-2510 to see if you can cancel your Private Mortgage Insurance premium.
Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Fort Neck Real Estate Appraisal, Inc. is a full service Residential Real Estate Appraisal Company, based in Nassau County. We are dedicated to providing quality appraisal products and services tailored to our clients needs. Founded in 2005, we specialize in single family, two to four family homes, mixed use properties and high value residential properties in Nassau, Suffolk, Kings, Queens, Westchester, Rockland, Orange, and Bronx Counties in New York.
Fort Neck Real Estate Appraisal, Inc. 3883 Park Avenue Seaford, NY 11783
