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Zacour & Associates, Inc. can help you remove your Private Mortgage Insurance
A 20% down payment is typically the standard when getting a mortgage.
Because the risk for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the expenses of foreclosure, reselling the home, and natural value changes in the event a purchaser defaults.
During the recent mortgage boom of the last decade, it was widespread to see lenders making deals with down payments of 10, 5, 3 or often 0 percent.
A lender is able to manage the additional risk of the minimal down payment with Private Mortgage Insurance or PMI.
This added policy covers the lender in case a borrower defaults on the loan and the market price of the house is lower than the balance of the loan.
Since 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, PMI is costly to a borrower.
It's favorable for the lender because they secure the money, and they are covered if the borrower doesn't pay, different from a piggyback loan where the lender takes in all the losses.
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Has your home value appreciated since you first purchased? Call Zacour & Associates, Inc. today at 915-581-1141 to see if you can get rid of your Private Mortgage Insurance premium.
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How can homeowners prevent bearing the cost of PMI?
The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount.
Wise homeowners can get off the hook ahead of time. The law designates that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent.
Because it can take several years to reach the point where the principal is only 80% of the original loan amount, it's crucial to know how your Texas home has appreciated in value.
After all, any appreciation you've acquired over the years counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% mark?
Your neighborhood may not adhere to national trends and/or your home could have secured equity before the economy cooled off. So even when nationwide trends forecast falling home values, you should know most importantly that real estate is local.
The difficult thing for almost all consumers to figure out is whether their home equity has exceeded the 20% point. An accredited, Texas licensed real estate appraiser can certainly help.
It's an appraiser's job to recognize the market dynamics of their area.
At Zacour & Associates, Inc., we're experts at recognizing value trends in El Paso, El Paso County, and surrounding areas, and we know when property values have risen or declined.
Faced with figures from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the home owner can delight in the savings from that point on.
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The savings from dropping the PMI required when you got your mortgage will make up for the price of the appraisal in no time. Nobody is more qualified than Zacour & Associates, Inc. when it comes to appreciating values in El Paso and El Paso County. Contact us today.
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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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