Let Southern Coast Appraisals LLC help you decide if you can eliminate your PMI

A 20% down payment is typically accepted when getting a mortgage. Because the liability for the lender is usually only the remainder between the home value and the sum outstanding on the loan, the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and regular value changes in the event a borrower doesn't pay.

During the recent mortgage boom of the mid 2000s, it was widespread to see lenders only asking for down payments of 10, 5, 3 or sometimes 0 percent. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This added plan protects the lender in case a borrower is unable to pay on the loan and the value of the house is less than the loan balance.

PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and on many occasions isn't even tax deductible. It's advantageous for the lender because they acquire the money, and they get the money if the borrower defaults, as opposed to a piggyback loan where the lender consumes all the losses.


	The savings from dropping your PMI will make up for the cost of the appraisal in a matter of months. Nobody is more qualified than Southern Coast Appraisals LLC when it comes to appreciating values in the city of Ocean Springs and Jackson County. Contact us today.

How home owners can keep from bearing the cost of PMI

The Homeowners Protection Act of 1998 obligates the lenders on the majority of loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law guarantees that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. So, wise homeowners can get off the hook a little early.

It can take many years to arrive at the point where the principal is just 80% of the initial amount borrowed, so it's essential to know how your Mississippi home has appreciated in value. After all, any appreciation you've acquired over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not conform to national trends and/or your home could have gained equity before the economy cooled off. So even when nationwide trends forecast falling home values, you should know most importantly that real estate is local.

The difficult thing for most people to determine is whether their home equity has exceeded the 20% point. An accredited, Mississippi licensed real estate appraiser can certainly help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Southern Coast Appraisals LLC, we're experts at determining value trends in Ocean Springs, Jackson County, and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will often eliminate the PMI with little effort. At that time, the home owner can relish the savings from that point on.


	The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Nobody is more qualified than Southern Coast Appraisals LLC when it comes to appreciating values in Ocean Springs and Jackson 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