PMI Insurance on Your Home Loan

September 23, 2019 Leave a comment

Well, we might have good news for you!! Wouldn’t you like to find a way to get rid of the PMI portion of your mortgage payment? Or, maybe better yet, just have that amount be applied each month as an extra payment onto the principal of your loan? Mike Aldridge, Loan Officer with loanDepot.com has made available to us this analysis of what you can achieve:

REDUCING PMI in an increasing valued housing market?

For those that are seeing a housing increase in the KCMO metro area at 5.5+% year over year and have Private Mortgage Insurance (PMI) on your loan, please read this message!

As your home has increased in value, the normal timeline for PMI to drop off your loan has been potentially cut drastically. If you have a conventional loan you DON’T have to refinance to drop PMI. According to your amortization chart provided with your closing documents, PMI will automatically drop when you reach 78% Loan to Value (value of your home vs. what you owe). If you look at your Amortization chart (the illustration of how your loan payments are applied over the term), most PMI will take 10 years to drop off. This assumption is based on fact that your home never increases in value. We all know that our market has increased significantly each of the last 3+ years so here is what that can mean for you!

Example: If you purchased a home 4 yrs. ago with a conventional loan for $240,000 and put 5% down, your loan would be $228,000. Presume the term was 30 yrs. & PMI was $100/mo. and that PMI would automatically drop off in August 2024. But now let’s add the increase in value with the market at 5.5% for each of the past 4 years. That would place the current value of your home right at $297,318. Just comparing that to the original amount of your loan, that would put your loan at 76.69% of the value of your property, thereby qualifying you to get your PMI removed in less than 4 years. Less than 4 years because we know that your loan balance will be something less than $228,000. So, you could then apply the $100/mo. being paid for PMI to an additional principal payment, thereby allowing you to pay down your loan an additional $7,200 for the remaining 6 years you would have normally paid PMI. That should allow you to pay your loan off in 25 years instead of 30. Or, of course, you could reduce your payment by $100 as well.

** If you feel that you have reached this example and want to evaluate your loan, reach out to your servicing provider on your mortgage statement and request a PMI audit. In some cases you can see automated valuation without needing an appraisal OR you can potentially be prepared for need of an independent appraisal set up by your mortgage servicing provider.

We buy houses Rowlett

We all know that prices have risen significantly during the past three plus years, so you likely are well on your way to that magical 20% equity number. The following article is what got our attention and prompted us to reach out to our client base to bring this great opportunity to your attention: https://timandjulieharris.com/2018/07/17/home-prices-to-rise-2x-speed-of-inflation-and-pay.html

Preparing Your Home For Sale

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Fall is the second most frequent time to get your house on the market, so now might be a good time to create your punchlist for readying your home for sale.

Our first recommendation is that you conduct some research online to help you determine what is on the market within the price range you think you home will fit (including new homes), what you see different in the homes being marketed from your home (particularly the new homes) and identify from that research your tenative “To Do” punchlist for your home.

First, let’s start with the exterior and the mechanical. The Cone Team recommends that all owners considering selling their home consider hiring a qualified, professional home inspector so you can determine, before listing, what an independent third party identifies as the important issues. From that, we recommend you develop your final “To Do” punchlist for you home and proceed to get those important deficiencies noted by the home inspector repaired in preparation to listing your home. We also recommend keeping all receipts that were paid for contractors to do that repair work so prospective buyers can see that you have been proactive about delivering to them a quality, well-maintained home.

So the sign’s in the yard, your house has been staged, cleaned, photographed, and now you’re living like a monk!! The clutter’s gone, the lawn’s edged, the kids’ toys have been stripped to two boxes… you’ve worked hard! You’re now ready for the offers roll in! Right?

Need to sell your house in Dallas?

Meanwhile, “life” is still happening full force and you’re just trying to say ahead of it. Here’s a quick checklist for getting out the door so that your home is working hard while you’re hard at work:

  • Empty the showers of everything and put away all but the décor on the sink.
  • Hang the pretty towels then don’t use them. Toss any wet towels in the dryer, set it for 10 minutes and gather them when you come home.
  • Scoop the kitty litter, empty the diaper genie, flush toilets, lower lids.
  • Make beds, open drapes and tilt blinds.
  • Turn the a/c down to “ahhhhh!” so your hot and cranky buyers love you for thinking about their comfort.
  • Empty dishes from the sink and put away the paper towels, scrubbies, stoppers, and soap.
  • Turn on lamps in rooms that tend to be dark.
  • If there’s a pull-chain in the middle of your dark storage area leave the light on so buyers don’t have to grope around your boxes.

Take a moment to smile in satisfaction at knowing you’ve done all that you can and someone is going to fall in love with your home and feel very happy here. Onward!