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Have equity in your home? Want a lower payment? An appraisal from JGB Enterprises LLC can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. Because the liability for the lender is generally only the remainder between the home value and the sum due on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and typical value changes in the event a purchaser doesn't pay.
Lenders were accepting down payments dropping to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplemental policy takes care of the lender if a borrower defaults on the loan and the market price of the property is less than the balance of the loan.
PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible. As opposed to a piggyback loan where the lender consumes all the deficits, PMI is favorable for the lender because they acquire the money, and they get paid if the borrower doesn't pay.
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Did you secure your mortgage with less than 20% down? Contact JGB Enterprises LLC today at (856) 625-5047 to see if you can get rid of your Private Mortgage Insurance payment. |
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How home buyers can keep from bearing the cost of PMI With the passage of The Homeowners Protection Act of 1998, lenders are forced to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount on nearly all loans. The law guarantees that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, acute home owners can get off the hook a little early.
It can take a significant number of years to arrive at the point where the principal is just 80% of the original amount of the loan, so it's crucial to know how your New Jersey home has appreciated in value. After all, any appreciation you've gained over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends indicate falling home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home may have acquired equity before things declined.
An accredited, New Jersey licensed real estate appraiser can help home owners figure out if their equity has made it to the 20% point, as it's a tough thing to know. It is an appraiser's job to recognize the market dynamics of their area. At JGB Enterprises LLC, we know when property values have risen or declined. We're masters at recognizing value trends in Blackwood, Camden County, and surrounding areas. Faced with data 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.
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Has your home value appreciated since you first purchased? Call JGB Enterprises LLC today at (856) 625-5047. You may be able to get rid of your Private Mortgage Insurance premium. |
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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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