Linda Wilkins Real Estate Appraisals can help you remove your Private Mortgage InsuranceIt's typically understood that a 20% down payment is common when getting a mortgage. Considering the risk for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value variationsin the event a purchaser doesn't pay. During the recent mortgage boom of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to manage the additional risk of the small down payment with Private Mortgage Insurance or PMI. This supplemental policy protects the lender in the event a borrower doesn't pay on the loan and the value of the property is lower than what the borrower still owes on the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible. It's lucrative for the lender because they acquire the money, and they get the money if the borrower doesn't pay, opposite from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can prevent bearing the cost of PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law pledges that, at the request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, keen home owners can get off the hook a little early. It can take countless years to arrive at the point where the principal is only 20% of the original amount borrowed, so it's necessary to know how your home has grown in value. After all, every bit of appreciation you've accomplished over time counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends hint at decreasing home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have acquired equity before things cooled off. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to know the market dynamics of their area. At Linda Wilkins Real Estate Appraisals, we know when property values have risen or declined. We're experts at recognizing value trends in Humble, Harris County and surrounding areas. When faced with figures from an appraiser, the mortgage company will usually cancel the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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