Let J.E.K. Appraisals help you learn if you can get rid of your PMIA 20% down payment is typically the standard when purchasing a home. The lender's liability is often only the remainder between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and regular value changes in the event a purchaser defaults. The market was working with down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the additional risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender if a borrower is unable to pay on the loan and the worth of the home is less than what is owed on the loan. PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible. Different from a piggyback loan where the lender takes in all the costs, PMI is lucrative for the lender because they acquire the money, and they get the money if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can refrain from bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, smart homeowners can get off the hook a little early. It can take many years to reach the point where the principal is only 20% of the initial amount borrowed, so it's essential to know how your home has appreciated in value. After all, all of the appreciation you've obtained over the years counts towards removing 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 may have secured equity before things cooled off, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. The toughest 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 certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At J.E.K. Appraisals, we know when property values have risen or declined. We're experts at identifying value trends in Foley, Baldwin County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often do away with the PMI with little effort. At that time, the home owner can relish the savings from that point on.
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