Let Nathan Appraisals help you decide if you can cancel your PMIWhen getting a mortgage, a 20% down payment is typically the standard. Since the liability for the lender is usually only the difference between the home value and the amount remaining on the loan, the 20% adds a nice cushion against the expenses of foreclosure, reselling the home, and natural value fluctuationsin the event a purchaser defaults. During the recent mortgage boom of the mid 2000s, it became common to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender endure the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplementary policy covers the lender in the event a borrower defaults on the loan and the market price of the property is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be costly to a borrower. It's advantageous for the lender because they obtain the money, and they get the money if the borrower is unable to pay, separate 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 can a homeowner refrain from paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically eliminate 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 pledges that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take countless years to get to the point where the principal is only 20% of the original amount borrowed, so it's important to know how your home has increased in value. After all, any appreciation you've obtained over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be following the national trends and/or your home may have gained equity before things calmed down, so even when nationwide trends hint at plunging home values, you should understand that real estate is local. The difficult thing for almost all homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Nathan Appraisals, we're masters at identifying value trends in Lima, Allen 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 eliminate the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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