PMI Removal: Private Mortgage Insurance

 

Aegis Appraisals can help you remove your Private Mortgage Insurance.

What is PMI?

It’s generally known that providing a 20% down payment is a common practice when purchasing a home. This is because as most people obtain a mortgage, their lender’s risk is usually associated with the difference between the home’s value and the amount outstanding on the loan, and the 20% has been a generally accepted typical requirement from the lender to supply a buffer against losses from the chance of foreclosure and reselling the home, considering typical value variations in the market in the event a purchaser isn’t able to pay.

Lenders in recent years have begun taking down payments down to 10, 5 and even 0 percent under some loan programs, especially during the peak of the most recent mortgage boom. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance, or PMI. PMI covers the lender in the event a borrower is unable to pay on the loan and the worth of the house is lower than the balance of the loan.

 

PMI is costly to borrowers.

The cost of PMI is affected by factors like your credit score and the amount of your down payment. The cost can vary from borrower to borrower and generally runs between 0.5% and 2% of the loan amount of the mortgage. This cost is increased to a borrower when that $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment, gathers interest charges over 30 years, and many times isn’t even tax deductible. It’s advantageous for the lender because they secure the money, and they get the money if the borrower doesn’t pay, opposite from a piggyback loan where the lender consumes all the costs.

 

 

How can homeowners refrain from bearing the cost of PMI?

With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cease the PMI when the principal balance of the loan reaches 78% of the primary loan amount. Smart homeowners can get off the hook sooner than expected. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals just 80%.

 

Since it can take countless years to reach the point where the principal is only 20% of the initial amount borrowed, it’s crucial to know how your home has grown in value. After all, every bit of appreciation you’ve accomplished over time counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be reflecting the national trends and/or your home might have secured equity before things calmed down, so even when nationwide trends predict falling home values, you should understand that real estate is local.

A certified, licensed real estate appraiser can help homeowners understand just when their home’s equity rises above the 20% point, as it’s a hard thing to know.

As appraisers, it’s our job to keep up with the market dynamics of our area.

 

At Aegis Appraisals, we’re experts at recognizing value trends in the Greater Houston metropolitan area and surrounding counties, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will most often eliminate the PMI with little effort. The homeowner can delight in the savings from that point on.

Great company
Jackie M. of Cypress, TX
09/19/2022
Great company
Jackie M
Jackie M. of Cypress, TX
09/19/2022
Great service for a great price. Received my appraisal in less than 48 hours. Will use again.
Daniel R. of Conroe, TX
12/04/2022
Great service for a great price. Received my appraisal in less than 48 hours. Will use again.
Daniel R
Daniel R. of Conroe, TX
12/04/2022
Management is informative, knowledgeable, and professional. Would definitely recommend!
Ben G. of Nashville, TN
8/28/2020
Management is informative, knowledgeable, and professional. Would definitely recommend!
Ben G. of Nashville, TN
8/28/2020
Get an appraisal! From Aegis! Their appraisal helped reduce the assessed value $46K on my home. I was a 1st time protester of an appraisal district.
Ted Norris of Huntsville, TX
8/31/2020
Get an appraisal! From Aegis! Their appraisal helped reduce the assessed value $46K on my home. I was a 1st time protester of an appraisal district.
Ted Norris of Huntsville, TX
8/31/2020
Quick response measuring home sq feet. Accurate and good value
Anonymous of Spring, TX
5/9/2016
Quick response measuring home sq feet. Accurate and good value
Anonymous of Spring, TX
5/9/2016
Would definitely recommend. Steven is great and very helpful if you have any questions or concerns regarding appraisal report. Will be using again.
Jason B. of Houston, TX
5/31/2016
Would definitely recommend. Steven is great and very helpful if you have any questions or concerns regarding appraisal report. Will be using again.
Jason B. of Houston, TX
5/31/2016
Competent. Prompt. Personable. Responsive.
Phil S. of Bellaire, TX
10/16/2016
Competent. Prompt. Personable. Responsive.
Phil S. of Bellaire, TX
10/16/2016
They actually measure the inside and the outside each and every corner of the wall . you're going to get a very accurate appraisal
Racheal G. of Houston, TX
1/22/2017
They actually measure the inside and the outside each and every corner of the wall . you're going to get a very accurate appraisal
Racheal G. of Houston, TX
1/22/2017
I am a Real Estate Broker. The first time I worked with Aegis, they were assigned to appraise one of my listings. From speaking with him, I could tell Steven was so thorough, that I kept his information for future needs. He is an excellent appraiser and a wealth of knowledge. If I am stuck on pricing a home, I ...
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Erica H. of Houston, TX
4/10/2017
I am a Real Estate Broker. The first time I worked with Aegis, they were assigned to appraise one of my listings. From speaking with him, I could tell Steven was so thorough, that I kept his information for future needs. He is an excellent appraiser and a wealth of knowledge. If I am stuck on pricing a home, I know they will do an excellent job appraising it!
Erica H. of Houston, TX
4/10/2017
Excellent customer service. They took the time to answer all my questions at the time of the appraisal. After I received my appraisal they then walked me through the appraisal explaining how they determined the value of my home and again answering any questions along the way. The cost of their services is well worth the confidence that I have ...
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Anonymous of Spring, TX
5/5/2017
Excellent customer service. They took the time to answer all my questions at the time of the appraisal. After I received my appraisal they then walked me through the appraisal explaining how they determined the value of my home and again answering any questions along the way. The cost of their services is well worth the confidence that I have going forward in the sale my home.
Anonymous of Spring, TX
5/5/2017
They did a fast and efficient job
Steve C. of Kingwood, TX
8/4/2017
They did a fast and efficient job
Steve C. of Kingwood, TX
8/4/2017
Prompt and efficient, had quote the next day, very satisfied
Harry B. of Houston, TX
10/17/2017
Prompt and efficient, had quote the next day, very satisfied
Harry B. of Houston, TX
10/17/2017
Used their services to get an appraisal to successfully contest the appraisal district's inflated appraisal
Jeff H. of Conroe, TX
8/21/2022
Used their services to get an appraisal to successfully contest the appraisal district's inflated appraisal
Jeff H. of Conroe, TX
8/21/2022
-Prompt to respond to questions / comments -were able to complete appraisal in a timely manner
Diane M. of Tomball, TX
08/22/2022
-Prompt to respond to questions / comments -were able to complete appraisal in a timely manner
Diane M. of Tomball, TX
08/22/2022
Incredibly professional. Knew the market and was very detailed. I have worked with many appraisers over the years but none have been as good as Aegis and Steven Weber.
Jon G. of Magnolia, TX
10/3/2021
Incredibly professional. Knew the market and was very detailed. I have worked with many appraisers over the years but none have been as good as Aegis and Steven Weber.
Jon G. of Magnolia, TX
10/3/2021
Very courteous & professional!
Tim Benge
11/16/2021
Very courteous & professional!
Tim Benge
11/16/2021
Excellent service, very knowledgeable and very friendly guys 5 ⭐️
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D Hermosa
2021
Excellent service, very knowledgeable and very friendly guys 5 ⭐️
D Hermosa
2021
Extremely professional, accurate, and easy to work with. They went above and beyond to help me make an educated decision as a first-time homebuyer. One of the friendliest companies I've come across!
Benjamin G of Cypress, TX
8/16/2022
Extremely professional, accurate, and easy to work with. They went above and beyond to help me make an educated decision as a first-time homebuyer. One of the friendliest companies I've come across!
extremely professional
Benjamin G of Cypress, TX
8/16/2022
These guys are awesome. Julius has been extremely informative and most helpful in very quick timelines. They are my go to. Thank you guys for being so good at your jobs!
Michael Owens
8/21/2022
These guys are awesome. Julius has been extremely informative and most helpful in very quick timelines. They are my go to. Thank you guys for being so good at your jobs!
Michael Owens
8/21/2022