Let Ruffino Appraisal Group, LLC. help you discover if you can eliminate your PMI

A 20% down payment is typically the standard when getting a mortgage. Since the risk for the lender is usually only the difference between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the costs of foreclosure, reselling the home, and natural value changes on the chance that a borrower is unable to pay.

During the recent mortgage upturn of the mid 2000s, it was customary to see lenders reducing down payments to 10, 5 or often 0 percent. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower is unable to pay on the loan and the value of the property is lower than the balance of 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 payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender takes in all the damages, PMI is lucrative for the lender because they secure the money, and they receive payment if the borrower defaults.


Has your real estate appreciated since you first purchased? Call Ruffino Appraisal Group, LLC. today at 954 448-0054 to see if you can save money by removing your Private Mortgage Insurance premium.

How homebuyers can prevent bearing the cost of PMI

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

Because it can take many years to get to the point where the principal is just 80% of the original loan amount, it's crucial to know how your Florida home has increased in value. After all, every bit of appreciation you've achieved over time counts towards abolishing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends signify falling home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home could have gained equity before things simmered down.

The hardest thing for many consumers to figure out is whether their home equity has exceeded the 20% point. An accredited, Florida licensed real estate appraiser can certainly help. It's an appraiser's job to know 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. Faced with data from an appraiser, the mortgage company will most often do away with the PMI with little anxiety. At that time, the home owner can relish 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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