Let L & B Appraisals help you decide if you can eliminate your PMIA 20% down payment is usually the standard when buying a house. Considering the risk for the lender is oftentimes only the difference between the home value and the amount due on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and regular value fluctuationsin the event a borrower doesn't pay. During the recent mortgage boom of the last decade, it became widespread to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI 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 rolled into the mortgage monthly payment and often isn't even tax deductible, PMI is costly to a borrower. It's money-making for the lender because they secure the money, and they receive payment if the borrower is unable to pay, different from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can avoid bearing the cost of PMIWith the employment of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Acute home owners can get off the hook a little earlier. The law promises that, at the request of the home owner, the PMI must be released when the principal amount equals only 80 percent. Considering it can take countless years to reach the point where the principal is just 20% of the initial amount of the loan, it's necessary to know how your home has grown in value. After all, any appreciation you've gained over the years counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends indicate plummeting home values, you should realize that real estate is local. The hardest thing for almost all home owners 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 know the market dynamics of our area. At L & B Appraisals, we know when property values have risen or declined. We're masters at determining value trends in Bowling Green, Warren County and surrounding areas. Faced with figures from an appraiser, the mortgage company will often do away with the PMI with little trouble. At which time, the homeowner can enjoy the savings from that point on.
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