Do you know just how deep the impact is when a homeowner removes PMI?
Here are 3 simple, but valuable PMI Removal Tips that turn realtors into heroes.
Many homeowners are feeling the squeeze of deciding which bills to pay and do not realize that removing PMI is a possibility to ease the burden.
If you are like me, looking for different ways to save money, especially now with the rising costs everything, then you’ll love sharing this idea.
As a realtor, you will help your clients save money, and as a homeowner, the savings will relieve the stress of juggling bills.
This post is all about valuable PMI Removal Tips that turn realtors into heroes.
When PMI seemed like it was no big deal
Meet Sarah and Mike Johnson, a young professional couple who, like many Americans, jumped into homeownership during the 2021 real estate boom.
With a new baby on the way and remote work becoming permanent, they purchased their $500,000 dream home with just 10% down, eager to start their new chapter.
The Initial Purchase: 2021
- Home Price: $500,000
- Down Payment: $50,000 (10%)
- Interest Rate: 3.5%
- Monthly Payment: $2,800
- PMI Payment: $300 monthly
- Total Loan: $450,000
Sarah, a software developer, and Mike, a high school teacher, felt comfortable with the payments initially.
Their combined income of $150,000 made the mortgage manageable, even with PMI.
The Financial Squeeze: 2021-2024
Like many young families, the Johnsons faced mounting pressures as inflation took hold. Their monthly expenses skyrocketed:
- Groceries: From $800 to $960 monthly
- Utilities: From $300 to $345 monthly
- Gas: From $200 to $280 monthly
- Childcare: From $1,200 to $1,344 monthly
- Total Monthly Increase: $429
Plus new expenses:
- Preschool enrollment fees
- Medical bills from their second pregnancy
- Home maintenance costs
- Rising property taxes
The strain was becoming unbearable.
They were using savings to cover monthly expenses, cutting back on retirement contributions, and worried about their financial future.
Mike started considering summer school teaching to make ends meet, while Sarah was logging extra hours at work.
The Silver Lining: Market Appreciation
This is where their realtor stepped in with life-changing news. The housing market sale prices had worked in their favor. Their home’s value increased significantly:
- 2021 Purchase Price: $500,000
- 2024 Market Value: $600,000
- Equity Gained: $100,000
- Mortgage Balance: $425,000
- Current LTV: 71%
The PMI Removal Process
Their realtor reached out proactively with a detailed plan and guided them through three simple steps:
- Preparation Phase • Review Lender requirements for removal of PMI • Gathered payment history • Documented home improvements
- Documentation Package • Ordered professional appraisal • Compiled all required paperwork • Prepared formal request letter
- Lender Submission • Managed communication • Tracked progress • Secured approval
The Financial Impact
The removal of PMI created a cascade of positive changes:
- Monthly PMI Savings: $300
- Annual Savings: $3,600
- Five-Year Savings: $18,000
Sarah tears up when sharing what this means for their family. “That $300 monthly savings changed everything. We’re not just surviving anymore… we’re planning for our future.”
What $300 Monthly Means for the Johnsons:
- Fully funded emergency savings account
- Resumed retirement contributions
- Started college fund for their children
- Family vacation fund
- Home improvement budget
Long-term Financial Wellness
The Johnsons redirected their savings:
- $150 to retirement accounts
- $50 to children’s college fund
- $50 to emergency savings
- $50 to home maintenance fund
“The stress relief is priceless,” Mike shares. “We can finally breathe easier and enjoy our home instead of worrying about it.”
The Ripple Effect of Removing PMI
Beyond the monthly savings, imagine what the reduced financial stress means for the Johnson’s marriage relationship and work-life balance.
Now Sarah could reduce overtime hours and spend more time with family.
And, Mike could focus on that advanced teaching certification he has always wanted and take summer breaks without financial worry.
The Johnsons now have time to participate in community events and volunteer at local schools.
Plus, with improved finances, they’re now planning home improvements and referring friends to their realtor who helped make all this happen.
Key Takeaways for Realtors
Help your clients by:
- Tracking Client Milestones: • Purchase dates • Down payment amounts • Current market values
- Creating Value: • Monthly market updates • PMI removal calculators • Educational resources
- Building Relationships: • Regular check-ins • Celebration of milestones • Ongoing support
The PMI Bottom Line
The Johnsons’ story isn’t unique – millions of homeowners are currently paying PMI, many of whom might qualify for removal.
And, helping clients in removing PMI isn’t just about monthly savings – it’s about transforming lives.
Realtors have the unique opportunity to create lasting positive change for their clients, building stronger communities and successful businesses in the process.
Remember: Every client has a story, and every PMI removal opportunity represents a chance to make a significant impact in someone’s life.
Stay proactive, stay informed, and keep adding value long after the initial sale.
Sources: Federal Reserve Economic Data, National Association of REALTORS®, Bureau of Labor Statistics, Local Market Analysis Reports, Consumer Financial Protection Bureau
This post is all about valuable PMI Removal Tips that turn realtors into heroes.
