Appraisal Associates can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is typically the standard. Because the risk for the lender is generally only the difference between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and typical value changeson the chance that a borrower doesn't pay. Lenders were taking down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the market price of the home is less than the balance of the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage 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, contradictory to 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 homeowners can prevent paying PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically eliminate 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 earlier. The law states that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. Because it can take countless years to reach the point where the principal is just 20% of the initial amount of the loan, it's necessary to know how your home has increased in value. After all, all of the appreciation you've achieved over the years counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends indicate plunging home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home could have acquired equity before things cooled off. The toughest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It is an appraiser's job to understand the market dynamics of their area. At Appraisal Associates, we know when property values have risen or declined. We're masters at analyzing value trends in Birmingham, Jefferson County and surrounding areas. When faced with data from an appraiser, the mortgage company will most often drop the PMI with little effort. At that time, the homeowner can retain the savings from that point on.
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