Have equity in your home? Want a lower payment? An appraisal from Lemmon Appraisal Services can help you get rid of your PMI.A 20% down payment is usually accepted when buying a house. The lender's risk is generally only the difference between the home value and the amount due on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and regular value fluctuations in the event a purchaser defaults. Lenders were working with down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added plan protects the lender in the event a borrower defaults on the loan and the worth of the property 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 oftentimes isn't even tax deductible, PMI is costly to a borrower. Unlike a piggyback loan where the lender absorbs all the losses, PMI is lucrative for the lender because they obtain the money, and they get the money if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning 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 released when the principal amount reaches just 80 percent. Considering it can take countless years to arrive at the point where the principal is only 20% of the original amount of the loan, it's crucial to know how your home has grown in value. After all, all of the appreciation you've gained over the years counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends forecast plunging home values, be aware that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home might have acquired equity before things settled down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Lemmon Appraisal Services, we're masters at determining value trends in El Paso, El Paso County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally drop the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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