Let DenverT Appraisal help you figure out if you can get rid of your PMIA 20% down payment is usually the standard when getting a mortgage. Since the liability for the lender is oftentimes only the difference between the home value and the sum due on the loan, the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and typical value changeson the chance that a borrower defaults. During the recent mortgage boom of the last decade, it became customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan guards the lender in the event a borrower doesn't pay on the loan and the worth of the home is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be costly to a borrower. Contradictory to a piggyback loan where the lender consumes all the costs, PMI is advantageous for the lender because they obtain the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners avoid paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Savvy home owners can get off the hook a little early. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take many years to arrive at the point where the principal is only 20% of the original amount borrowed, so it's essential to know how your home has increased in value. After all, all of the appreciation you've accomplished over time counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends indicate decreasing home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have secured equity before things settled down. The difficult thing for most home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. It's an appraiser's job to recognize the market dynamics of their area. At DenverT Appraisal, we know when property values have risen or declined. We're masters at identifying value trends in West End, Moore County and surrounding areas. When faced with information from an appraiser, the mortgage company will often drop the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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