Capraro Appraisal Company, Inc. can help you remove your Private Mortgage Insurance

It's widely inferred that a 20% down payment is the standard when getting a mortgage. The lender's only exposure is usually just the difference between the home value and the balance due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and regular value variations in the event a purchaser defaults.

During the recent mortgage boom of the last decade, it became common to see lenders making deals with down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the additional risk of the small down payment with Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower defaults on the loan and the value of the house is less than the balance of the loan.

PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and on many occasions isn't even tax deductible. Different from a piggyback loan where the lender takes in all the damages, PMI is money-making for the lender because they secure the money, and they receive payment if the borrower doesn't pay.


Did you secure your mortgage with less than 20% down? Call Capraro Appraisal Company, Inc. today at (401) 353-5500 to see if you can get rid of your Private Mortgage Insurance premium.

How homeowners can keep from paying PMI

The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, keen home owners can get off the hook a little earlier.

Considering it can take many years to get to the point where the principal is just 80% of the initial amount of the loan, it's crucial to know how your Rhode Island home has grown in value. After all, every bit of appreciation you've obtained over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends forecast declining home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have secured equity before things declined.

The hardest thing for many homeowners to determine is whether their home equity has exceeded the 20% point. A certified, Rhode Island licensed real estate appraiser can certainly help. It is an appraiser's job to recognize the market dynamics of their area. At Capraro Appraisal Company, Inc., we know when property values have risen or declined. We're masters at identifying value trends in North Providence, Providence County, and surrounding areas. Faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little effort. At which time, the home owner can relish the savings from that point on.


The savings from getting rid of your PMI will make up for the price of the appraisal in a matter of months. Nobody is more qualified than Capraro Appraisal Company, Inc. when it comes to appreciating values in North Providence and Providence 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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