Let Edwards Appraisal Service, Inc. help you decide if you can cancel your PMIA 20% down payment is usually accepted when purchasing a home. Since the risk for the lender is often only the difference between the home value and the amount remaining on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and typical value variationsin the event a borrower defaults. During the recent mortgage upturn of the last decade, it was widespread to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This additional plan covers the lender in the event a borrower is unable to pay on the loan and the value of the home is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible, PMI is costly to a borrower. It's beneficial for the lender because they collect the money, and they get the money if the borrower doesn't pay, opposite from 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 homebuyers can avoid bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law states that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, smart home owners can get off the hook ahead of time. It can take countless years to reach the point where the principal is just 20% of the original loan amount, so it's important to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends predict falling home values, you should realize that real estate is local. The toughest thing for most home owners 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 recognize the market dynamics of their area. At Edwards Appraisal Service, Inc., we're masters at pinpointing value trends in Goldsboro, Wayne County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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