Ruffino Appraisal Group, LLC. can help you remove your Private Mortgage Insurance

When buying a house, a 20% down payment is usually the standard. Considering the risk for the lender is often only the remainder between the home value and the sum outstanding on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and typical value variations in the event a purchaser doesn't pay.

The market was accepting down payments discounted to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower defaults on the loan and the value of the home is less than the balance of the loan.

PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible. As opposed to a piggyback loan where the lender absorbs all the losses, PMI is money-making for the lender because they secure the money, and they receive payment if the borrower is unable to pay.


The savings from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than Ruffino Appraisal Group, LLC. when it comes to appreciating values in the city of Margate and Broward County. Contact us today.

How can homeowners refrain from bearing the expense of PMI?

As a result of The Homeowners Protection Act of 1998, lenders are required to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount on most loans. Wise home owners can get off the hook a little earlier. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent.

Since it can take several years to reach the point where the principal is only 80% of the original amount borrowed, it's essential to know how your Florida home has increased in value. After all, any appreciation you've gained over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends hint at lower overall home values, understand that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have gained equity before things simmered down.

The hardest thing for almost all people to determine is whether their home equity has exceeded the 20% point. An accredited, Florida licensed real estate appraiser can certainly help. As appraisers, it's our job to understand the market dynamics of our area. At Ruffino Appraisal Group, LLC., we're experts at recognizing value trends in Margate, Broward County, and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually eliminate the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.


Is PMI a part of your monthly mortgage payment? Call Ruffino Appraisal Group, LLC. today at 954 448-0054 or send us an e-mail. Documentation of your home's current value could save you thousands.

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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