Let Appraisal Professionals help you decide if you can eliminate your PMIIt's largely inferred that a 20% down payment is common when getting a mortgage. Since the risk for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice cushion against the costs of foreclosure, reselling the home, and regular value changesin the event a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it was customary to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender endure the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the market price of the house is less than the loan balance. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and generally isn't even tax deductible. It's profitable for the lender because they collect the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender absorbs all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can avoid bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute home owners can get off the hook ahead of time. The law promises that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. It can take many years to arrive at the point where the principal is just 20% of the original amount borrowed, so it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've accomplished over time counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends hint at plunging home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have acquired equity before things simmered down. The hardest thing for most homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It is an appraiser's job to keep up with the market dynamics of their area. At Appraisal Professionals, we're experts at analyzing value trends in Kyle, Hays County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will most often remove the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
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