Let Complete Appraisal, LLC help you figure out if you can get rid of your PMIA 20% down payment is usually accepted when buying a house. The lender's liability is usually only the difference between the home value and the amount due on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and natural value changes on the chance that a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower defaults on the loan and the value of the house is less than the balance of the loan. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. Different from a piggyback loan where the lender takes in all the losses, PMI is beneficial for the lender because they secure the money, and they get the money if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home owners can refrain from bearing the expense of PMIWith the utilization of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Keen homeowners can get off the hook a little early. The law stipulates that, upon request of the home owner, the PMI must be released 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 initial loan amount, so it's necessary to know how your home has grown in value. After all, any appreciation you've acquired over time counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends predict decreasing home values, understand that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have gained equity before things calmed down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Complete Appraisal, LLC, we know when property values have risen or declined. We're masters at recognizing value trends in Farmington, Hartford County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often drop the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
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