Let Rabin Appraisal Associates 847-337-5787 help you learn if you can cancel your PMIIt's typically understood that a 20% down payment is the standard when getting a mortgage. Since the risk for the lender is generally only the remainder between the home value and the sum outstanding on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and natural value changeson the chance that a purchaser defaults. Lenders were working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower doesn't pay on the loan and the value of the home is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI is pricey to a borrower. Unlike a piggyback loan where the lender takes in all the deficits, PMI is advantageous for the lender because they collect the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can prevent bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute home owners can get off the hook a little early. The law promises that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. Considering it can take many years to reach the point where the principal is just 20% of the initial loan amount, it's crucial to know how your home has increased in value. After all, any appreciation you've acquired over the years counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends forecast falling home values, understand that real estate is local. Your neighborhood might not be minding the national trends and/or your home may have secured equity before things calmed down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Rabin Appraisal Associates 847-337-5787, we know when property values have risen or declined. We're experts at identifying value trends in Gurnee, Lake County and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often do away with the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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