Collard Appraisal Group, Inc. can help you remove your Private Mortgage InsuranceA 20% down payment is typically the standard when purchasing a home. Because the liability for the lender is usually only the difference between the home value and the sum due on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value fluctuationsin the event a purchaser doesn't pay. During the recent mortgage boom of the last decade, it was common to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender endure the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This additional policy takes care of the lender in case a borrower is unable to pay on the loan and the market price of the property is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and generally isn't even tax deductible, PMI is costly to a borrower. It's profitable for the lender because they obtain the money, and they get the money if the borrower doesn't pay, opposite from a piggyback loan where the lender absorbs all the costs. 
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 expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute homeowners can get off the hook sooner than expected. The law pledges that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. Considering it can take many years to arrive at the point where the principal is only 20% of the initial loan amount, it's essential to know how your home has appreciated in value. After all, all of the appreciation you've gained over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home could have acquired equity before things calmed down, so even when nationwide trends forecast declining home values, you should understand that real estate is local. The hardest thing for many homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to know the market dynamics of their area. At Collard Appraisal Group, Inc., we're experts at pinpointing value trends in , Cumberland County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
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