Let Pendley & Pendley Appraisers help you decide if you can get rid of your PMIA 20% down payment is typically the standard when getting a mortgage. The lender's liability is usually 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 typical value changes in the event a purchaser defaults. During the recent mortgage boom of the mid 2000s, it became common to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender endure the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower is unable to pay on the loan and the market price of the house is lower than what is owed on the loan. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible. Different from a piggyback loan where the lender absorbs all the deficits, PMI is favorable for the lender because they secure the money, and they get paid 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 home buyers refrain from paying PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Smart homeowners can get off the hook ahead of time. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. It can take countless years to get to the point where the principal is just 20% of the original loan amount, so it's important to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over the years counts towards dismissing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be adopting the national trends and/or your home could have acquired equity before things settled down, so even when nationwide trends predict falling home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to understand the market dynamics of their area. At Pendley & Pendley Appraisers, we're experts at pinpointing value trends in Cumming, Forsyth County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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