Buyers dutifully pay their PMI (private mortgage insurance) premiums and accept it as a permanent obligation. It is not. In the case of amortized mortgages, there comes a point in time where the buyer has enough equity (20%) to cancel the insurance. Normally, that’s some years away. But not always.
Equity in a house can reach 20% not only by loan paydown but also because of significant home improvements or appreciation in value.
Any broker who represented a buyer before the recent real estate market rise will score huge points with their client with this tip. Your buyer, who probably had no idea he or she could cancel the PMI so quickly, will love you for your knowledge and will likely remember you when it comes time to sell.
Chances are if that buyer has PMI insurance he/she can force the lender to cancel it NOW and pocket the premium savings. Why? Because of the appreciation bringing home equity up to 20%. How can they do it? Simple. Just write to the lender and submit an appraisal report prepared by a certified appraiser.
Knowledge, expertise and service are what real estate professionals bring to the table.
