Let Vaughn Appraisal Service help you learn if you can eliminate your PMIWhen getting a mortgage, a 20% down payment is typically the standard. Because the risk for the lender is often only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and natural value changeson the chance that a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it was widespread to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to endure the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan covers the lender if a borrower doesn't pay on the loan and the value of the property is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible, PMI is costly to a borrower. It's money-making for the lender because they obtain the money, and they get paid if the borrower doesn't pay, different from a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can refrain from bearing the cost of PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law states that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, acute home owners can get off the hook a little earlier. Because it can take many years to get to the point where the principal is only 20% of the initial amount of the loan, it's crucial to know how your home has increased in value. After all, every bit of appreciation you've gained over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends predict decreasing home values, realize that real estate is local. Your neighborhood might not be following the national trends and/or your home may have secured equity before things calmed down. A certified, 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 keep up with the market dynamics of their area. At Vaughn Appraisal Service, we know when property values have risen or declined. We're masters at recognizing value trends in Middleton, Hardeman County and surrounding areas. When faced with data from an appraiser, the mortgage company will most often do away with the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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