Let Straughan Appraisal Services help you decide if you can get rid of your PMIIt's widely understood that a 20% down payment is the standard when getting a mortgage. Considering the liability for the lender is usually only the difference between the home value and the sum due on the loan, the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and typical value changesin the event a borrower defaults. During the recent mortgage boom of the mid 2000s, it was customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. This additional policy covers the lender in the event a borrower doesn't pay on the loan and the market price of the house is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible, PMI can be costly to a borrower. Contradictory to a piggyback loan where the lender takes in all the losses, PMI is lucrative for the lender because they acquire the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law guarantees that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, acute home owners can get off the hook a little early. It can take countless years to reach the point where the principal is just 20% of the initial loan amount, so it's necessary to know how your home has increased in value. After all, every bit of appreciation you've gained over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends forecast plummeting home values, understand that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home could have secured equity before things simmered down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Straughan Appraisal Services, we know when property values have risen or declined. We're masters at determining value trends in Rockwall, Rockwall County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.
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