Let Dolan Appraisal Company, Inc. help you decide if you can eliminate your PMIIt's largely understood that a 20% down payment is common when getting a mortgage. The lender's risk is usually only the difference between the home value and the amount outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and regular value variations in the event a borrower is unable to pay. The market was accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower is unable to pay on the loan and the value of the home 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 payment and many times isn't even tax deductible, PMI is costly to a borrower. It's money-making for the lender because they secure the money, and they receive payment if the borrower is unable to pay, opposite from a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner prevent bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Savvy homeowners can get off the hook a little earlier. The law states that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. It can take many years to reach the point where the principal is only 20% of the original loan amount, so it's crucial to know how your home has increased in value. After all, any appreciation you've accomplished over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be following the national trends and/or your home could have gained equity before things simmered down, so even when nationwide trends indicate plummeting home values, you should realize that real estate is local. The toughest thing for almost all home owners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. It's an appraiser's job to recognize the market dynamics of their area. At Dolan Appraisal Company, Inc., we know when property values have risen or declined. We're experts at recognizing value trends in Saint Louis, Saint Louis County and surrounding areas. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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