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

It's largely understood that a 20% down payment is accepted when purchasing a home. The lender's liability is usually only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and natural value variations on the chance that a purchaser doesn't pay.

The market was working with down payments discounted to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the market price of the house is lower than the loan balance.

PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and on many occasions isn't even tax deductible. It's profitable for the lender because they secure the money, and they get paid if the borrower doesn't pay, unlike a piggyback loan where the lender consumes all the losses.


Did you secure your mortgage with less than 20% down? Contact Ruffino Appraisal Group, LLC. today at 954 448-0054. You may be able to save money by removing your Private Mortgage Insurance premium.

How can a homeowner refrain from paying PMI?

With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount on nearly all loans. The law promises that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, savvy home owners can get off the hook ahead of time.

Considering it can take many years to get to the point where the principal is just 80% of the initial amount of the loan, it's important to know how your Florida home has appreciated in value. After all, every bit of appreciation you've gained over time counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not conform to national trends and/or your home might have acquired equity before the economy cooled off. So even when nationwide trends predict decreasing home values, you should know most importantly that real estate is local.

The toughest thing for most consumers to determine is whether their home equity has exceeded the 20% point. An accredited, Florida licensed real estate appraiser can definitely help. It's an appraiser's job to know the market dynamics of their area. At Ruffino Appraisal Group, LLC., we're masters at identifying value trends in Margate, Broward County, and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will often do away with the PMI with little anxiety. At which time, the homeowner can relish the savings from that point on.


Did you secure your mortgage with less than 20% down? Call Ruffino Appraisal Group, LLC. today at 954 448-0054. 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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