Let Sean McKenna help you learn if you can cancel your PMIA 20% down payment is usually accepted when getting a mortgage. Because the risk for the lender is usually only the difference between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and natural value variationsin the event a borrower defaults. During the recent mortgage upturn of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan guards the lender in the event a borrower is unable to pay on the loan and the market price of the property is less than the balance of the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible. Separate from a piggyback loan where the lender takes in all the damages, PMI is money-making for the lender because they secure the money, and they receive payment 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 homebuyers can refrain from bearing the cost of PMIThe Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease 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 beforehand. The law promises that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take many years to get to the point where the principal is just 20% of the initial amount borrowed, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over time counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Your neighborhood may not be minding the national trends and/or your home may have secured equity before things simmered down, so even when nationwide trends predict decreasing home values, you should realize that real estate is local. The hardest thing for many home owners to know 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 understand the market dynamics of our area. At Sean McKenna , we know when property values have risen or declined. We're experts at identifying value trends in Loveland, Larimer County and surrounding areas. Faced with figures from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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