Harrington Appraisal Company can help you remove your Private Mortgage InsuranceA 20% down payment is usually the standard when buying a house. The lender's liability is oftentimes only the difference between the home value and the amount due on the loan, so the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and regular value fluctuations in the event a borrower doesn't pay. During the recent mortgage boom of the last decade, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplemental policy protects the lender in the event a borrower is unable to pay on the loan and the value of the home is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI can be pricey to a borrower. Opposite from a piggyback loan where the lender absorbs all the deficits, PMI is money-making for the lender because they acquire 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 buyers can keep from paying PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all 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, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. So, wise homeowners can get off the hook ahead of time. It can take many years to get to the point where the principal is just 20% of the original amount borrowed, so it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have acquired equity before things calmed down. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Harrington Appraisal Company, we know when property values have risen or declined. We're experts at recognizing value trends in Houston, Harris County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often drop the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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