Fox Appraisal Services can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. The lender's liability is oftentimes only the remainder between the home value and the amount remaining on the loan, so the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and natural value variations in the event a purchaser is unable to pay. Lenders were working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the added risk of the low down payment with Private Mortgage Insurance or PMI. This supplemental policy covers the lender if a borrower defaults on the loan and the value of the house is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI can be pricey to a borrower. Opposite from a piggyback loan where the lender takes in all the deficits, PMI is lucrative for the lender because they collect the money, and they get the money 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 home owners can prevent bearing the expense of PMIThe Homeowners Protection Act of 1998 forces 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. The law states that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, keen homeowners can get off the hook a little early. It can take many years to get to the point where the principal is just 20% of the original loan amount, so it's essential to know how your home has grown in value. After all, any appreciation you've acquired over time counts towards dismissing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends indicate plummeting home values, be aware that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have secured equity before things calmed down. 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 difficult thing to know. It is an appraiser's job to understand the market dynamics of their area. At Fox Appraisal Services, we're experts at pinpointing value trends in Brookings, Tehama County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
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