Let All-Star Appraisers help you figure out if you can get rid of your PMIA 20% down payment is usually accepted when purchasing a home. Considering the liability for the lender is generally only the remainder between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and natural value changesin the event a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it was common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender handle the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower defaults on the loan and the worth of the house is lower than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be costly to a borrower. It's lucrative for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, opposite from a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can prevent bearing the cost of PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Keen homeowners can get off the hook ahead of time. The law states that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. Considering it can take many years to get to the point where the principal is just 20% of the initial amount borrowed, it's crucial to know how your home has increased in value. After all, any appreciation you've obtained over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends hint at falling home values, understand that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have gained 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's an appraiser's job to know the market dynamics of their area. At All-Star Appraisers, we know when property values have risen or declined. We're masters at identifying value trends in Westminster, Carroll County and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often drop the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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