Let Daniel Todd Appraisal Services, LLC help you determine if you can cancel your PMIWhen buying a house, a 20% down payment is usually the standard. Considering the liability for the lender is often only the difference between the home value and the sum due on the loan, the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and typical value variationsin the event a borrower doesn't pay. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders taking down payments of 10, 5 or often 0 percent. A lender is able to manage the additional risk of the low down payment with Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower doesn't pay on the loan and the market price of the property is lower than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be costly to a borrower. It's money-making for the lender because they secure the money, and they receive payment if the borrower is unable to pay, contradictory to a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law pledges that, at the request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, savvy home owners can get off the hook ahead of time. It can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, so it's essential to know how your home has increased in value. After all, every bit of appreciation you've accomplished over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be minding the national trends and/or your home could have secured equity before things cooled off, so even when nationwide trends signify plummeting home values, you should understand that real estate is local. A certified, 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 keep up with the market dynamics of our area. At Daniel Todd Appraisal Services, LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Bloomington, Monroe County and surrounding areas. When faced with data from an appraiser, the mortgage company will often eliminate the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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