Real Estate Appraisers & Consultants

Private mortgage insurance (PMI) protects the lender or investor against loss, not the home owner. If you pay 5% down, the PMI company will insure, or guarantee, the top 10% of the loan. If you go into default, they will reimburse the lender.

Typically PMI is required for a sale if there is less than a 20% down payment.
Not all lenders require PMI, even for low down payment loans.
PMI protects the lender, not the consumer.
PMI costs vary but are usually 0.5% of the loan amount for the first year of the loan, with lower payments in later years.
PMI is collected by the loan servicer, and sent to the PMI company.
PMI removal is based on both the payment history and the value of the collateral (house).
Early cancellation PMI removal requirements vary considerably among lenders.
There are only four companies that offer PMI.

How to get PMI removed:

The Homeowners Protection Act of 1998, which took effect in 1999, requires lenders to tell the buyer at closing how many years and months it will take for them to reach that 80 percent level and cancel PMI. Lenders must automatically cancel PMI when the balance hits 78 percent.

Keep track of your payments on the principal of the mortgage. When you reach the point where the loan-to-value ratio hits 80 percent, notify the lender that it is time to discontinue the PMI premiums.

Most, but not all, lenders will remove their PMI requirements if:

The loan to value ratio on your loan is 80% or less. (Some require 75% or another LTV).
You have made your payments on time for two years.

Step 1 - Contact your lender

Your first step is to contact your lender (the company you send your payments to). Contact information should be on your payment stub or invoice. Lender requirements vary widely on LTV, etc.

Step 2 - Get an appraisal

Your lender will tell you which appraiser you can use. Sometimes you can select your own appraiser. Sometimes the lender chooses the appraiser.

If you can select your own appraiser and are located in the State of Georgia, we can help you. Call us at 678-520-8754.

Example:

Let's say you put down 10 percent or $10,000 on a $100,000 house. The lender multiplies the 90 percent loan, or $90,000, by .005. The result is an annual PMI of $450, which is divided into monthly payments of $37.50. Most home buyers need PMI because 20 percent of the sale price on a home is a lot of money; for instance, that's $20,000 on a $100,000 home. Home buyers must maintain the PMI premiums until they cross that one-fifth-of-principal threshold, a process that can take years in longer-term mortgages.

Note: The law does allow lenders to continue requiring PMI all the way down to 50 percent equity for so-called high-risk borrowers. Traditionally, those loans that are considered riskier include reduced documentation loans, in which customers provide less proof of income and other information during the approval process. Loans for people with spotty credit histories and higher debt-to-income ratios also fall into this category. Additionally, some FHA loans require payment of PMI throughout the entire life of the loan.


	PMI (Private Mortgage Insurance)

	Private mortgage insurance (PMI) protects the lender or investor against loss, not the home owner. If you pay 5% down, the PMI company will insure, or guarantee, the top 10% of the loan. If you go into default, they will reimburse the lender. Typically PMI is required for a sale if there is less than a 20% down payment. Not all lenders require PMI, even for low down payment loans. PMI protects the lender, not the consumer. PMI costs vary but are usually 0.5% of the loan amount for the first year of the loan, with lower payments in later years. PMI is collected by the loan servicer, and sent to the PMI company. PMI removal is based on both the payment history and the value of the collateral (house). Early cancellation PMI removal requirements vary considerably among lenders. There are only four companies that offer PMI. How to get PMI removed: The Homeowners Protection Act of 1998, which took effect in 1999, requires lenders to tell the buyer at closing how many years and months it will take for them to reach that 80 percent level and cancel PMI. Lenders must automatically cancel PMI when the balance hits 78 percent. Keep track of your payments on the principal of the mortgage. When you reach the point where the loan-to-value ratio hits 80 percent, notify the lender that it is time to discontinue the PMI premiums. Most, but not all, lenders will remove their PMI requirements if: The loan to value ratio on your loan is 80% or less. (Some require 75% or another LTV). You have made your payments on time for two years. Step 1 - Contact your lender Your first step is to contact your lender (the company you send your payments to). Contact information should be on your payment stub or invoice. Lender requirements vary widely on LTV, etc. Step 2 - Get an appraisal Your lender will tell you which appraiser you can use. Sometimes you can select your own appraiser. Sometimes the lender chooses the appraiser. If you can select your own appraiser and are located in the State of Georgia, we can help you. Call us at 678-520-8754. Example: Let's say you put down 10 percent or $10,000 on a $100,000 house. The lender multiplies the 90 percent loan, or $90,000, by .005. The result is an annual PMI of $450, which is divided into monthly payments of $37.50. Most home buyers need PMI because 20 percent of the sale price on a home is a lot of money; for instance, that's $20,000 on a $100,000 home. Home buyers must maintain the PMI premiums until they cross that one-fifth-of-principal threshold, a process that can take years in longer-term mortgages. Note: The law does allow lenders to continue requiring PMI all the way down to 50 percent equity for so-called high-risk borrowers. Traditionally, those loans that are considered riskier include reduced documentation loans, in which customers provide less proof of income and other information during the approval process. Loans for people with spotty credit histories and higher debt-to-income ratios also fall into this category. Additionally, some FHA loans require payment of PMI throughout the entire life of the loan.	. . . . . . . . . .
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