Let Golden Rule Appraisals help you determine if you can get rid of your PMIWhen buying a house, a 20% down payment is usually the standard. Considering the risk for the lender is usually only the remainder between the home value and the sum remaining on the loan, the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and typical value fluctuationson the chance that a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender handle the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This added plan protects the lender if a borrower is unable to pay on the loan and the market price of the house is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be costly to a borrower. Contradictory to a piggyback loan where the lender consumes all the costs, PMI is favorable for the lender because they collect the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 makes 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. Wise home owners can get off the hook a little early. The law pledges that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. Because it can take many years to arrive at the point where the principal is only 20% of the original loan amount, it's crucial to know how your home has appreciated 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 fallen below the 80% threshold? Despite the fact that nationwide trends signify decreasing home values, understand that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have acquired equity before things settled down. The toughest thing for many home owners to know is just when their home's equity goes over 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 Golden Rule Appraisals, we're masters at analyzing value trends in Edmond, Oklahoma County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will most often drop the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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