Let Hughes Home Appraisals help you discover if you can eliminate your PMIIt's typically known that a 20% down payment is the standard when purchasing a home. The lender's liability is usually only the remainder between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and natural value variations on the chance that a purchaser defaults. Banks were taking down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplemental plan covers the lender in case a borrower is unable to pay on the loan and the value of the property is less than what the borrower still owes on the loan. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible. Unlike a piggyback loan where the lender consumes all the damages, PMI is advantageous for the lender because they secure the money, and they get the money if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner keep from paying PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Wise home owners can get off the hook a little earlier. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. It can take countless years to reach the point where the principal is just 20% of the original amount borrowed, so it's important to know how your home has increased in value. After all, any appreciation you've acquired over the years counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends predict plunging home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home may have acquired equity before things simmered down. The difficult thing for almost all home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to recognize the market dynamics of our area. At Hughes Home Appraisals, we know when property values have risen or declined. We're masters at identifying value trends in Cincinnati, Hamilton County and surrounding areas. When faced with data from an appraiser, the mortgage company will often cancel the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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