Cannon Real Estate Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is usually the standard when purchasing a home. Since the risk for the lender is usually only the remainder between the home value and the sum remaining on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and regular value changesin the event a borrower defaults. During the recent mortgage boom of the last decade, it was customary to see lenders requiring down payments of 10, 5 or often 0 percent. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower is unable to pay on the loan and the value of the property is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. It's money-making for the lender because they secure the money, and they receive payment if the borrower is unable to pay, unlike 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 home owners keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute homeowners can get off the hook a little earlier. The law states that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. Since it can take many years to get to the point where the principal is just 20% of the original amount of the loan, it's important to know how your home has appreciated in value. After all, any appreciation you've achieved over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be adopting the national trends and/or your home might have secured equity before things simmered down, so even when nationwide trends predict plummeting home values, you should realize that real estate is local. The difficult thing for almost all home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. It's an appraiser's job to recognize the market dynamics of their area. At Cannon Real Estate Appraisals, we know when property values have risen or declined. We're experts at identifying value trends in Findlay, Shelby County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally remove the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
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