Let www.Appraisal-Center.com help you figure out if you can cancel your PMI

When getting a mortgage, a 20% down payment is usually the standard. Since the liability for the lender is often only the remainder between the home value and the amount due on the loan, the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and regular value changesin the event a purchaser defaults.

During the recent mortgage boom of the mid 2000s, it became widespread to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to endure the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan covers the lender if a borrower doesn't pay on the loan and the worth of the house is lower than what is owed on the loan.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI is pricey to a borrower. It's favorable for the lender because they secure the money, and they get paid if the borrower doesn't pay, separate from a piggyback loan where the lender takes in all the deficits.

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 keep from bearing the expense of PMI?

The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Keen homeowners can get off the hook sooner than expected. The law states that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent.

Since it can take countless years to reach the point where the principal is only 20% of the initial loan amount, it's necessary to know how your home has grown in value. After all, every bit of appreciation you've obtained over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not be minding the national trends and/or your home may have acquired equity before things simmered down, so even when nationwide trends forecast declining home values, you should understand that real estate is local.

The hardest thing for almost all 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. It's an appraiser's job to know the market dynamics of their area. At www.Appraisal-Center.com, we're masters at determining value trends in Seattle, King County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will most often eliminate the PMI with little effort. At that time, the home owner can retain the savings from that point on.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year