Most lenders require a real estate appraisal by a state-certified appraiser as the primary proof required to eliminate unnecessary PMI insurance. If you're a homeowner, you're likely familiar with private mortgage insurance (PMI). While PMI can help you secure a home loan with a lower down payment, it can also add a significant monthly expense to your mortgage. Fortunately, there is a way to potentially eliminate this cost through a professional home appraisal. In this blog post, we’ll explain what PMI is, when it can be removed, and how appraisals play a crucial role in the process.
What is PMI?
Private mortgage insurance is a type of insurance that protects lenders in case a borrower defaults on their loan. Typically, if your down payment is less than 20% of the home's purchase price, lenders will require you to carry PMI. While this insurance allows you to buy a home without a large down payment, it can increase your monthly mortgage costs significantly.
When should you seek an appraisal to Eliminate PMI?
1. When you meet the terms of your PMI agreement. Your loan must be in good standing.
2. When home prices increase.
3. After you finish major renovations.
4. When you want to refinance
How Can Appraisals Help?
A professional appraisal is a key step in the process of removing PMI. Here’s how it works:
Determine Current Market Value: An appraiser will assess your home to determine its current market value, taking into account factors like location, size, condition, and recent comparable sales in your area.
Establish Equity: If the appraisal indicates that your home has increased in value since your purchase, you may be able to demonstrate that you have more than 20% equity, qualifying you for PMI removal.
Document Your Request: Once you receive the appraisal report, you can submit it to your lender as evidence of your request to remove PMI. Be sure to include any supporting documentation, such as proof of payments and the original loan terms.
Preparing for Your Appraisal
To maximize your chances of a favorable appraisal, consider taking the following steps:
Make Minor Repairs: Address any visible issues, such as leaky faucets or chipped paint, to improve your home’s overall impression.
Enhance Curb Appeal: A well-maintained exterior can leave a positive first impression on the appraiser.
Provide a List of Upgrades: Compile a list of any renovations or improvements you’ve made since purchasing the home. This can help the appraiser understand the added value of your property.
Conclusion
Removing PMI can lead to significant savings on your monthly mortgage payments, making it a worthwhile pursuit for homeowners. By securing a professional appraisal, you can establish the true market value of your home and potentially eliminate this extra cost. If you’re considering PMI removal, Maverick Appraisals in San Antonio is here to help. Contact us today to schedule your appraisal and take the first step toward saving on your mortgage!
Call today at to get a quick consultation to see if you might qualify to have your PMI removed. 469-352-0585
You can also email us: andrewp@maverickappraisals.com
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