Let Howell Appraisal, Inc. help you figure out if you can get rid of your PMIA 20% down payment is usually the standard when getting a mortgage. Because the liability for the lender is usually only the remainder between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and natural value variationsin the event a borrower is unable to pay. The market was working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. This additional policy guards the lender in the event a borrower defaults on the loan and the value of the property is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible, PMI can be pricey to a borrower. It's lucrative for the lender because they acquire the money, and they get paid if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can refrain from bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Savvy homeowners can get off the hook a little early. The law pledges that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. Because it can take many years to arrive at the point where the principal is just 20% of the initial amount borrowed, it's important 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 dropped below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home might have acquired equity before things settled down, so even when nationwide trends hint at plummeting home values, you should realize that real estate is local. The hardest thing for many home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to know the market dynamics of our area. At Howell Appraisal, Inc., we know when property values have risen or declined. We're masters at recognizing value trends in Spotsylvania, Spotsylvania County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally eliminate the PMI with little effort. At that time, the homeowner can retain the savings from that point on.
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