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

It's generally inferred that a 20% down payment is common when purchasing a home. Since the risk for the lender is oftentimes only the difference between the home value and the sum due on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and regular value changes in the event a borrower doesn't pay.

During the recent mortgage boom of the mid 2000s, it was customary to see lenders reducing down payments to 10, 5 or even 0 percent. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the value of the house is lower than what the borrower still owes on the loan.

Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible, PMI can be costly to a borrower. Different from a piggyback loan where the lender consumes all the losses, PMI is profitable for the lender because they secure the money, and they are covered if the borrower doesn't pay.


The money you keep from getting rid of your PMI will make up for the cost of the appraisal in a matter of months. 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 homeowner prevent bearing the expense of 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 reaches 78 percent of the original loan amount on most loans. The law states that, at the request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. So, acute homeowners can get off the hook sooner than expected.

It can take a significant number of years to arrive at the point where the principal is only 80% of the initial amount borrowed, so it's crucial to know how your Florida home has increased in value. After all, all of the appreciation you've achieved over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Even when nationwide trends predict declining home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home may have secured equity before things cooled off.

An accredited, Florida licensed real estate appraiser can help homeowners figure out if their equity has exceeed the 20% point, as it's a hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Ruffino Appraisal Group, LLC., we know when property values have risen or declined. We're masters at identifying value trends in Margate, Broward County, and surrounding areas. When faced with information from an appraiser, the mortgage company will generally drop the PMI with little effort. At which time, the homeowner can relish 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. 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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