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

It's generally known that a 20% down payment is common when buying a house. The lender's liability is oftentimes only the remainder between the home value and the amount outstanding on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuations in the event a borrower defaults.

During the recent mortgage upturn of the mid 2000s, it was customary to see lenders making deals with down payments of 10, 5, 3 or even 0 percent. A lender is able to endure the added risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender in case a borrower doesn't pay on the loan and the market price of the property is lower than what the borrower still owes on the loan.

PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible. It's profitable for the lender because they secure the money, and they get the money if the borrower is unable to pay, as opposed to a piggyback loan where the lender takes in all the losses.


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

How can home owners refrain from bearing the expense of PMI?

With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount on most loans. Wise homeowners can get off the hook sooner than expected. The law pledges that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent.

It can take a significant number of years to reach the point where the principal is just 80% of the original amount of the loan, so it's important to know how your Florida home has grown in value. After all, all of the appreciation you've accomplished over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends indicate decreasing home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have gained equity before things cooled off.

The difficult thing for many homeowners to determine is just when their home's equity rises above the 20% point. A certified, Florida licensed real estate appraiser can certainly help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! 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. Faced with information from an appraiser, the mortgage company will often cancel the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.


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. stays current with value trends in Margate and Broward County. Contact us today.

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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