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We Sell Homes
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PMI Removal Appraisals
What is PMI?
Private Mortgage Insurance or PMI is an insurance policy for the lender. It is additional money built in to a borrower’s monthly mortgage payment which insures the lender against loss if the borrower defaults on the mortgage loan. It is generally required by a lender if a borrower makes a down payment of less than 20% when they purchase their home. This additional money paid each month can add up to thousands of dollars over the course of the loan.
How do I know if I am paying PMI?
It should be noted in your monthly mortgage statement. If not you should contact your lender or mortgage servicer.
Can I have PMI removed?
In many cases the answer is yes. Once you determine that you are paying PMI you must contact your lender and inquire as to what requirements are needed to remove PMI. Generally what is needed is for your home to be valued at more than 80% of the loan amount. Different lenders have different guidelines or requirements for PMI removal. Some require good payment history.
How do I know if my home is worth more than 80% of the loan amount?
The lender generally requires that an appraisal be performed by a local State-Certified Real Estate Appraiser. It is important that you contact your lender before having an appraisal performed since some lenders have a list of appraisers that are approved by their company. Generally the lender will allow the home owner to choose an appraiser. It is important that you select an experienced appraiser that works in and is familiar with your area and that has a State Certification.
How much will I save?
Once you determine the amount of your monthly PMI payment multiply it by how many payments you have left to find out how much you will pay over the remaining life of the loan. Compare this total amount with the one time cost of an appraisal. The savings from having PMI removed will most likely pay for the cost of an appraisal many times over and save you thousands of dollars. |
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