Astute Appraisals, Inc. can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. The lender's liability is oftentimes 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 on the chance that a borrower doesn't pay. The market was accepting down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This added policy covers the lender in case a borrower defaults on the loan and the value of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be pricey to a borrower. It's favorable for the lender because they secure the money, and they get the money if the borrower is unable to pay, separate from 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 buyers can prevent bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law stipulates that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, smart homeowners can get off the hook sooner than expected. It can take countless years to get to the point where the principal is only 20% of the original loan amount, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over the years counts towards abolishing PMI. So what's the reason for paying 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 simmered down, so even when nationwide trends signify plummeting home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners 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 recognize the market dynamics of their area. At Astute Appraisals, Inc., we know when property values have risen or declined. We're masters at recognizing value trends in Columbia, Howard County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
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