Let Crescent Appraisal Group, Inc. help you learn if you can get rid of your PMIIt's widely understood that a 20% down payment is the standard when buying a house. Considering the risk for the lender is often only the difference between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and typical value changesin the event a borrower is unable to pay. During the recent mortgage upturn 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 small down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower is unable to pay on the loan and the worth 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 bundled into the mortgage payment and many times isn't even tax deductible, PMI can be costly to a borrower. It's beneficial for the lender because they collect the money, and they get the money 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 homeowners keep from paying PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Savvy homeowners can get off the hook ahead of time. The law stipulates that, at the request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. Considering it can take countless years to get to the point where the principal is only 20% of the original amount borrowed, it's essential to know how your home has grown in value. After all, all of the appreciation you've acquired over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be minding the national trends and/or your home might have acquired equity before things cooled off, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. The hardest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Crescent Appraisal Group, Inc., we're experts at recognizing value trends in Metairie, Jefferson County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often drop the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.
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