Let Powell Appraisal Services help you decide if you can cancel your PMIWhen getting a mortgage, a 20% down payment is usually the standard. The lender's risk is usually only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and typical value variations on the chance that a purchaser defaults. The market was accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the additional risk of the low down payment with Private Mortgage Insurance or PMI. This supplemental policy protects the lender if a borrower doesn't pay on the loan and the market price of the house is lower than what is owed on the loan. PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible. It's profitable for the lender because they collect the money, and they get paid if the borrower is unable to pay, separate from a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers keep from paying PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Wise home owners can get off the hook a little early. The law pledges that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take many years to reach the point where the principal is just 20% of the initial loan amount, so it's important to know how your home has increased in value. After all, all of the appreciation you've obtained over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home might have secured equity before things settled down, so even when nationwide trends predict plummeting home values, you should realize that real estate is local. The difficult thing for most homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Powell Appraisal Services, we know when property values have risen or declined. We're masters at pinpointing value trends in Rockville, Montgomery County and surrounding areas. Faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little anxiety. At which time, the home owner can enjoy the savings from that point on.
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