PMI, or private mortgage insurance, allows individuals to purchase their home with less than 20% down payment. For this reason, lenders are very wary of lending more than a certain percentage of a home’s value. Traditionally, this has been 80%, but a new 75% standard is being adopted by more and more lenders. The cushion this provides the lender helps ensure that their losses from loan defaults are kept to a minimum.
In recent years, however, it has become increasingly more common to see home buyers using down payments of less than 10%. Naturally, loaning this much presents the lenders with a lot more risk. To offset this risk, these transactions often require PMI. This supplemental policy protects the lender in case a borrower defaults on the loan, and the value of the house is lower than the loan balance.
The hardest thing for most homeowners is knowing just when their home equity rises above the 20% point. The certified real estate appraisers at Gwinnett County Home Appraiser can help you out with this. It is our job to know the market dynamics of your area. Faced with the data from our report, the mortgage company can most often eliminate your PMI with little trouble. The savings from dropping the PMI pays for the appraisal in a matter of months, at which time the homeowner can enjoy the savings from that point on.
As a trusted Georgia home appraiser since 2001, Gwinnett County Home Appraiser will provide you with the service, details, and speedy home appraisal reports many of our customers have come to expect. Let us be of service to you. Contact us today for your complimentary consultation.