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It’s no secret that home values are on the rise. As in many areas across the nation, this has been happening slowly yet steadily for the past couple years. And it doesn’t come as much of surprise to homeowners, particularly given the growing scarcity of inventory of homes on hand in our marketplace.
There May Be Hidden Equity In Your Home
With those increasing values, however, comes another exciting fringe benefit that most homeowners are not aware of. In fact, we stumbled upon it ourselves after recently assisting a client who had their home reappraised. Though they had bought their home fairly recently, the decision to have their home reappraised ended up in their learning they had built 20% equity in their home in such a short time.
More Equity = No Mortgage Insurance
As you may know, with the most commonly used loan products like FHA loans, you no longer are required to pay Private Mortgage Insurance on the mortgage once you build 20% equity in your home. In fact, the amount of monthly PMI recently went up for FHA borrowers, making it an even greater expense than borrowers that have loans originating prior to April 1 this year are used to paying.
A Relatively Inexpensive Appraisal Is All You Need
If your property value has gone up and if the equity in your home is at least 20% of your loan value, you can eliminate your PMI payment altogether saving you a LOT of money for the rest of your loan. And with rapidly rising home values given the inventory outlook right now, your appraisal amount could very likely be much higher than what you paid for the home just a few years ago, last year or even as soon as just six months ago.
Contact us today and we’ll put together some comparable properties for you, assist you in finding a reputable appraiser and help you determine whether this is a viable option for you. Why pay more than you need to?