Let Fox Appraisal Services help you decide if you can get rid of your PMIWhen buying a house, a 20% down payment is typically the standard. Since the risk for the lender is often only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuationsin the event a borrower defaults. Lenders were accepting down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower defaults on the loan and the market price of the house is lower than the balance of the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible. It's profitable for the lender because they acquire the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home owners can keep from bearing the cost of PMIWith the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law pledges that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, keen homeowners can get off the hook a little early. It can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, so it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've acquired over the years counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not be following the national trends and/or your home might have secured equity before things simmered down, so even when nationwide trends predict decreasing home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Fox Appraisal Services, we're experts at determining value trends in Brookings, Tehama County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally remove the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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