Let ExactAppraise, Inc. help you determine if you can eliminate your PMIA 20% down payment is typically accepted when getting a mortgage. The lender's risk is often only the remainder between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the costs of foreclosure, reselling the home, and natural value changes on the chance that a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added plan takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the house is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible, PMI can be expensive to a borrower. It's profitable for the lender because they collect the money, and they receive payment if the borrower defaults, opposite from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can refrain from paying PMIWith the employment of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law pledges that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, wise homeowners can get off the hook sooner than expected. Since it can take many years to arrive at the point where the principal is only 20% of the original loan amount, it's important to know how your home has increased in value. After all, any appreciation you've achieved over the years counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends predict falling home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have acquired equity before things simmered down. The hardest thing for most homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It's an appraiser's job to understand the market dynamics of their area. At ExactAppraise, Inc., we're masters at pinpointing value trends in Dallas, Dallas County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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