Smart Appraisals can help you remove your Private Mortgage InsuranceIt's typically understood that a 20% down payment is accepted when purchasing a home. Considering the risk for the lender is generally only the remainder between the home value and the sum due on the loan, the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and natural value fluctuationsin the event a purchaser defaults. Lenders were accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI guards the lender if a borrower doesn't pay on the loan and the value of the home is lower than the balance of the loan. PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible. It's profitable for the lender because they collect the money, and they receive payment if the borrower doesn't pay, opposite from a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, smart homeowners can get off the hook a little earlier. It can take countless years to reach the point where the principal is just 20% of the initial amount borrowed, so it's necessary to know how your home has increased in value. After all, every bit of appreciation you've acquired over time counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be adhering to the national trends and/or your home could have acquired equity before things calmed down, so even when nationwide trends forecast plummeting home values, you should realize that real estate is local. The hardest thing for most home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to understand the market dynamics of our area. At Smart Appraisals, we know when property values have risen or declined. We're masters at recognizing value trends in , Minnehaha County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally drop the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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