Let Ruffino Appraisal Group, LLC. help you figure out if you can get rid of your PMI

It's largely known that a 20% down payment is common when buying a house. The lender's risk is oftentimes only the difference between the home value and the balance remaining on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and natural value variations in the event a borrower is unable to pay.

The market was taking down payments discounted to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This additional policy takes care of the lender in the event a borrower is unable to pay on the loan and the value of the property is less than what is owed on the loan.

PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and on many occasions isn't even tax deductible. Different from a piggyback loan where the lender takes in all the deficits, PMI is profitable for the lender because they collect the money, and they get paid if the borrower defaults.


Does your monthly mortgage payment have a lineitem for PMI? Call Ruffino Appraisal Group, LLC. today at 954 448-0054 or send us an e-mail. A current appraisal could save you thousands.

How homeowners can keep from bearing the cost of PMI

The Homeowners Protection Act of 1998 obligates the lenders on the majority of loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Smart home owners can get off the hook a little early. The law pledges that, upon request of the homeowner, the PMI must be released 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 loan amount, so it's necessary to know how your Florida home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards dismissing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Your neighborhood may not adhere to national trends and/or your home could have gained equity before things declined. So even when nationwide trends hint at falling home values, you should understand that real estate is local.

An accredited, Florida licensed real estate appraiser can help homeowners figure out if their equity has reached the 20% point, as it's a tough thing to know. It is an appraiser's job to recognize the market dynamics of their area. At Ruffino Appraisal Group, LLC., we're masters at analyzing 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 most often remove the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.


Does your monthly house payment have a lineitem for PMI? Call Ruffino Appraisal Group, LLC. today at 954 448-0054 or send us an e-mail. A current appraisal 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