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Connie Nugera can help you remove your Private Mortgage Insurance
It's typically understood that a 20% down payment is the standard when buying a house.
Because the liability for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value variations in the event a borrower doesn't pay.
Lenders were working with down payments dropping to 10, 5 and often 0 percent during the mortgage boom of the last decade.
A lender is able to endure the added risk of the reduced down payment with Private Mortgage Insurance or PMI.
PMI guards the lender in case a borrower is unable to pay on the loan and the value of the house is lower than what is owed 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.
As opposed to a piggyback loan where the lender consumes all the damages, PMI is money-making for the lender because they obtain the money, and they receive payment if the borrower defaults.
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The savings from getting rid of your PMI pays for the appraisal in a matter of months. Nobody is more qualified than Connie Nugera when it comes to appreciating values in the city of Pasadena and Los Angeles County. Contact us today.
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How homebuyers can prevent bearing the cost of PMI
The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount.
The law states that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, smart home owners can get off the hook sooner than expected.
Considering it can take many years to get to the point where the principal is only 80% of the initial loan amount, it's essential to know how your California home has increased in value.
After all, every bit of appreciation you've acquired 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 could have secured equity before the economy simmered down. So even when nationwide trends predict decreasing home values, you should understand that real estate is local.
A certified, California licensed real estate appraiser can help home owners 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 know the market dynamics of their area.
At Connie Nugera, we're masters at pinpointing value trends in Pasadena, Los Angeles County, and surrounding areas, and we know when property values have risen or declined.
When faced with figures from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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Does your monthly house payment have a lineitem for PMI? Call Connie Nugera today at 6264877722 or send us an e-mail. A current appraisal could save you thousands.
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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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