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Jim Anderson - REMAX Associates
From REAL Trends-Denver/Dallas...
Are You Paying Too Much For Private Mortgage Insurance?
"As many as 2.7 million U.S. homeowners paying for private mortgage insurance (PMI) annually may be doing so needlessly and don't even know it. Sharp increases in home sale prices across the country in the past three years helped push equity stakes held by many PMI payers well past the 20 percent threshold required by most lenders to cancel the obligation. HomeGain studied home sale price increases in 61 American cities between June 1997 and June 2000 and found 95 percent registered sufficient increases in median sale prices to easily give many PMI payers equity in excess of 20 percent.
Did You Buy Your Home With Less Than 20 Percent Down?
Borrowers buying a home with less than a 20 percent down payment are usually required by lenders to purchase PMI. The typical cost per year ranges from 0.5 to 1 percent of the loan amount. For example, a homeowner with a $100,000 loan can expect to pay from $500 to $1,000 per year in PMI. When a borrower's equity reaches 20 percent, usually by paying down the loan balance and letting price appreciation lift the current value of the property, most lenders will drop the requirement when the homeowner meets certain criteria. Based on the HomeGain study, homeowners in the following 10 metropolitan areas who purchased homes prior to July 1997 achieved the highest equity increases: San Francisco Bay area; San Diego; Denver; Orange County, Calif; Seattle; Austin; Minneapolis-St.Paul; New York City; Newark and Detroit."
What About Salt Lake City?
Though not all areas of the Salt Lake valley have experienced comparable increases as these cities in the last three years, there has been significant appreciation in home equity since 1991 and it is still beneficial to the homeowner to be aware of the market and their options.
Free Market Analysis To Homeowners-
I am offering a free market analysis to homeowners that will update the market value of your home. This will help you reassess your insurance needs, plan home improvements, or determine the possibility of eliminating the PMI as referenced in this article. Call or e-mail me so we can save you some MONEY!
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