Let ATX Appraisals help you determine if you can get rid of your PMIIt's generally understood that a 20% down payment is accepted when purchasing a home. The lender's risk is often only the remainder between the home value and the amount remaining on the loan, so the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and typical value changes in the event a borrower doesn't pay. During the recent mortgage upturn of the last decade, it became common to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender manage the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplementary plan protects the lender in the event a borrower doesn't pay on the loan and the value of the home is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible, PMI is pricey to a borrower. Contradictory to a piggyback loan where the lender absorbs all the losses, PMI is beneficial for the lender because they acquire the money, and they get paid 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 can buyers refrain from bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Acute home owners can get off the hook beforehand. The law guarantees that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. It can take many years to reach the point where the principal is only 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 achieved over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be reflecting the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends indicate decreasing home values, you should realize that real estate is local. The toughest thing for almost all homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At ATX Appraisals, we know when property values have risen or declined. We're masters at determining value trends in Leander, Williamson County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally do away with the PMI with little trouble. At that time, the home owner can relish the savings from that point on.
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