If you plan on or have already purchased your home with a down payment under 20%, your mortgage carries an additional cost called PMI, or private mortgage insurance. Depending on the price of your home, PMI can add up to a significant amount pretty quickly.
If you have more than 20% equity in your home, you may qualify to have your PMI removed.
Townhouse Appraisers will provide your lender with verifiable proof of your home’s current value, so you keep more of your money.
Over 15 million Americans have been able to purchase homes because of mortgage insurance making up for the down payment difference. Homes purchased with a down payment of at least 20% have enough equity to cover any potential losses by the lender, so PMI is not required.
Under the Homeowner’s Protection Act (HPA) of 1998, you have the right to request cancellation of PMI when you pay down your mortgage to the point that it equals 80% of the original purchase price or appraised value of your home at the time the loan was obtained, whichever is less. Under the HPA, mortgage lenders or providers must automatically cancel PMI coverage on most loans once you pay down your mortgage to 78% of the value if you are current on your loan.
If the loan is delinquent on the date of automatic termination, the lender must terminate the coverage as soon as the loan becomes current. Most lenders require an appraisal by a state-certified appraiser as proof of value in order to eliminate private mortgage insurance.
Carrying PMI when it’s no longer needed decreases the money available for other household concerns. Townhouse Appraisers offers a specific service for homeowners who have met the 80% loan-to-value metric. For a nominal fee, we will provide you with a detailed statement of your home’s current value.
Ready to remove your private mortgage insurance and keep more of your money? Contact Townhouse Appraisers today for a free consultation.