Let Appraisal First, Inc. help you discover if you can eliminate your PMIWhen getting a mortgage, a 20% down payment is usually the standard. The lender's liability is generally only the remainder between the home value and the amount outstanding on the loan, so the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and typical value fluctuations on the chance that a borrower doesn't pay. During the recent mortgage boom of the last decade, it became common to see lenders requiring down payments of 10, 5 or even 0 percent. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower defaults 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 bundled into the mortgage monthly payment and often isn't even tax deductible, PMI can be costly to a borrower. Contradictory to a piggyback loan where the lender consumes all the deficits, PMI is money-making for the lender because they secure 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 buyers prevent bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Smart home owners can get off the hook ahead of time. The law guarantees that, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is only 20% of the initial loan amount, so it's crucial to know how your home has grown in value. After all, all of the appreciation you've achieved over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends signify plummeting home values, understand that real estate is local. Your neighborhood may not be following the national trends and/or your home might have acquired equity before things cooled off. The toughest thing for many homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. It is an appraiser's job to recognize the market dynamics of their area. At Appraisal First, Inc., we're masters at analyzing value trends in Springfield, Greene County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At which time, the home owner can retain the savings from that point on.
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