Let help you figure out if you can eliminate your PMIWhen buying a house, a 20% down payment is typically the standard. The lender's risk is generally only the remainder between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and regular value variations in the event a borrower is unable to pay. The market was working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower doesn't pay on the loan and the value of the property is less than what the borrower still owes on the loan. PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and many times isn't even tax deductible. It's money-making for the lender because they collect the money, and they get the money if the borrower defaults, contradictory to a piggyback loan where the lender absorbs 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 home buyers avoid bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Savvy homeowners can get off the hook a little earlier. The law pledges that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the initial amount of the loan, so it's crucial to know how your home has appreciated in value. After all, any appreciation you've acquired over the years 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 acquired equity before things calmed down, so even when nationwide trends hint at decreasing home values, you should understand that real estate is local. The difficult thing for almost all home owners to know 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 recognize the market dynamics of our area. At , we're experts at analyzing value trends in , Baltimore County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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