Have equity in your home? Want a lower payment? An appraisal from Appraisal by Andrea Abbott can help you get rid of your PMI.It's widely inferred that a 20% down payment is the standard when purchasing a home. Since the risk for the lender is oftentimes only the remainder between the home value and the amount due on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and regular value variationson the chance that a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became widespread to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender handle the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan protects the lender if a borrower is unable to pay on the loan and the worth of the property is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and many times isn't even tax deductible, PMI is costly to a borrower. It's beneficial for the lender because they collect the money, and they get the money if the borrower defaults, contradictory to a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Savvy homeowners can get off the hook beforehand. The law guarantees that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take many years to reach the point where the principal is only 20% of the initial amount of the loan, so it's crucial to know how your home has increased in value. After all, all of the appreciation you've accomplished over time counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home might have gained equity before things settled down, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Appraisal by Andrea Abbott, we know when property values have risen or declined. We're masters at analyzing value trends in Colleyville, Tarrant County and surrounding areas. When faced with information from an appraiser, the mortgage company will often eliminate the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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