Last time we learned that PMI, like PMS, doesn’t last forever. Aside from home owners asking for it to be removed and aside from lenders terminating it when the principal balance of the loan reaches 78% of the original loan amount, there is another way to have it eradicated.
For people living in areas where their home value has risen, the value could actually exceed the amount of principal owned on the mortgage. In this situation the lender is under no legal obligation to remove the Private Mortgage Insurance. Usually if the home owner has been prompt on their monthly payments and is not an exceptional risk, the lender will agree to remove the extra fees.
The hardest thing for most home owners to know is just when does their home equity rise above this magical 20%? A certified, licensed Appraiser like Verdad Valuation can help. Owner and appraiser, Kelly Seaton, says that it is his job to know the market dynamics of this area.
He said, “I know when property values have risen or declined. Together we can find the current value of your home and remove the PMI payments. Faced with our data, most mortgage companies will eliminate the PMI with little trouble. The savings from dropping the PMI pays for my appraisal fee within a matter of months. Then, you can enjoy the savings on your mortgage from that point on.”
Verdad Valuation has more information like this at their website.
Cindy Seaton, REALTOR