Let Astute Appraisals, Inc. help you determine if you can cancel your PMIWhen purchasing a home, a 20% down payment is typically the standard. The lender's liability is generally only the difference between the home value and the amount remaining on the loan, so the 20% provides a nice cushion against the costs of foreclosure, reselling the home, and natural value changes on the chance that a borrower is unable to pay. During the recent mortgage boom of the last decade, it became customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower defaults on the loan and the worth of the property is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. Unlike a piggyback loan where the lender consumes all the deficits, PMI is money-making for the lender because they secure the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise home owners can get off the hook a little earlier. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. It can take many years to get to the point where the principal is just 20% of the original amount borrowed, so it's crucial to know how your home has increased in value. After all, any appreciation you've acquired over time counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be following the national trends and/or your home might have secured equity before things calmed down, so even when nationwide trends forecast falling home values, you should understand that real estate is local. A certified, 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. It is an appraiser's job to know the market dynamics of their area. At Astute Appraisals, Inc., we know when property values have risen or declined. We're experts at determining value trends in Columbia, Howard County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally remove the PMI with little anxiety. At which time, the home owner can enjoy the savings from that point on.
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