Let Country Manor help you learn if you can get rid of your PMIWhen buying a house, a 20% down payment is typically the standard. Considering the risk for the lender is generally only the remainder between the home value and the sum due on the loan, the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value fluctuationson the chance that a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower doesn't pay on the loan and the worth of the house is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI can be expensive to a borrower. Opposite from a piggyback loan where the lender consumes all the losses, PMI is money-making for the lender because they obtain 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 homebuyers keep from paying PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute home owners can get off the hook beforehand. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. Because it can take countless years to reach the point where the principal is just 20% of the original loan amount, it's essential to know how your home has appreciated in value. After all, any appreciation you've obtained over time counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends signify decreasing home values, be aware that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have gained equity before things cooled off. The toughest thing for almost all home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Country Manor, we're masters at analyzing value trends in Medina, Medina County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
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