Let Ruffino Appraisal Group, LLC. help you determine if you can cancel your PMI

A 20% down payment is typically the standard when getting a mortgage. Since the liability for the lender is generally only the difference between the home value and the sum due on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value changes on the chance that a purchaser is unable to pay.

Lenders were working with down payments dropping to 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy guards the lender if a borrower doesn't pay on the loan and the value of the house is less than the loan balance.

PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible. It's advantageous for the lender because they obtain the money, and they get paid if the borrower defaults, unlike a piggyback loan where the lender takes in all the damages.


The savings from dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Ruffino Appraisal Group, LLC. are experts when it comes to value trends in the city of Margate and Broward County. Contact us today.

How can a homebuyer prevent paying PMI?

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

It can take many years to reach the point where the principal is just 80% of the initial amount borrowed, so it's essential to know how your Florida home has appreciated in value. After all, any appreciation you've accomplished over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not conform to national trends and/or your home may have secured equity before the economy declined. So even when nationwide trends predict a reduction in home values, you should realize that real estate is local.

A certified, Florida licensed real estate appraiser can help home owners figure out if their equity has exceeed the 20% point, as it's a tough thing to know. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Ruffino Appraisal Group, LLC., we're experts at determining 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 generally eliminate the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.


Has your real estate appreciated since you first purchased? Contact 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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