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a la mode testing name can help you remove your Private Mortgage Insurance

A 20% down payment is typically the standard when purchasing a home. The lender's liability is often only the remainder between the home value and the amount remaining on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and natural value variations on the chance that a borrower defaults.

Banks were working with down payments discounted to 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. This added policy protects the lender if a borrower defaults on the loan and the market price of the property is less than what is owed on the loan.

PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible. Different from a piggyback loan where the lender absorbs all the deficits, PMI is lucrative for the lender because they secure the money, and they get the money if the borrower doesn't pay.


Is PMI a lineitem in your monthly house payment? Call a la mode testing name today at 4358438007 or send us an e-mail. A current appraisal could save you thousands.

How buyers can avoid bearing the cost of PMI

With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount on nearly all loans. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, savvy home owners can get off the hook sooner than expected.

It can take many years to reach the point where the principal is only 80% of the initial amount borrowed, so it's necessary to know how your Utah home has appreciated in value. After all, every bit of appreciation you've accomplished over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Even when nationwide trends predict falling home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home may have secured equity before things cooled off.

The difficult thing for almost all homeowners to determine is whether their home equity has exceeded the 20% point. An accredited, Utah licensed real estate appraiser can definitely help. It is an appraiser's job to know the market dynamics of their area. At a la mode testing name, we know when property values have risen or declined. We're masters at identifying value trends in Tooele, Tooele County, and surrounding areas. When faced with data from an appraiser, the mortgage company will often eliminate the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.


Is PMI a lineitem in your monthly house payment? Call a la mode testing name today at 4358438007 or send us an e-mail. A new appraisal 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