Let R & R Real Estate Solutions help you decide if you can eliminate your PMIA 20% down payment is typically the standard when getting a mortgage. Since the liability for the lender is generally only the difference between the home value and the amount due on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and typical value changeson the chance that a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became widespread to see lenders taking down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender in case a borrower doesn't pay on the loan and the value of the house is less than the loan balance. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. It's beneficial for the lender because they collect the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender takes in all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer prevent paying PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute home owners can get off the hook sooner than expected. The law states that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. Since it can take countless years to reach the point where the principal is just 20% of the initial amount borrowed, 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 why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends hint at plummeting home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have secured equity before things settled down. The toughest thing for most homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. It is an appraiser's job to understand the market dynamics of their area. At R & R Real Estate Solutions, we're masters at pinpointing value trends in La Vernia, Wilson County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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