Let Allatoona Appraisal help you learn if you can get rid of your PMIWhen buying a house, a 20% down payment is usually the standard. Since the risk for the lender is often only the difference between the home value and the amount due on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and regular value changeson the chance that a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became common to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender handle the additional 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 market price of the home is lower than what is owed on the loan. PMI can be pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender absorbs all the deficits, PMI is money-making for the lender because they secure the money, and they receive payment 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 homebuyer avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Smart home owners can get off the hook a little earlier. The law guarantees that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. Since it can take countless years to get to the point where the principal is just 20% of the initial amount of the loan, it's essential to know how your home has increased in value. After all, every bit of appreciation you've obtained 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% threshold? Your neighborhood might not be heeding the national trends and/or your home might have gained equity before things cooled off, so even when nationwide trends forecast declining home values, you should realize that real estate is local. The hardest thing for most homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Allatoona Appraisal, we know when property values have risen or declined. We're masters at analyzing value trends in Acworth, Cobb County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
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