Have equity in your home? Want a lower payment? An appraisal from Astute Appraisals, Inc. can help you get rid of your PMI.It's typically known that a 20% down payment is common when purchasing a home. Considering the risk for the lender is generally only the difference between the home value and the sum remaining on the loan, the 20% adds a nice cushion against the expenses of foreclosure, reselling the home, and typical value fluctuationson the chance that a purchaser doesn't pay. During the recent mortgage boom of the mid 2000s, it was customary to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy protects the lender in case a borrower defaults on the loan and the worth of the property is less than the balance of the loan. PMI can be pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and generally isn't even tax deductible. It's favorable for the lender because they secure the money, and they get the money if the borrower defaults, different 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 keep from paying PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Smart home owners can get off the hook ahead of time. The law designates that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the initial loan amount, so it's necessary to know how your home has grown in value. After all, every bit of appreciation you've acquired over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be heeding the national trends and/or your home may have secured equity before things calmed down, so even when nationwide trends indicate plummeting home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Astute Appraisals, Inc., we know when property values have risen or declined. We're masters at determining value trends in Columbia, Howard County and surrounding areas. Faced with data from an appraiser, the mortgage company will often cancel the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
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