Let High Touch Appraisal Service help you learn if you can get rid of your PMIWhen buying a house, a 20% down payment is usually the standard. The lender's risk is often only the difference between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and natural value fluctuations on the chance that a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to handle the added risk of the small down payment with Private Mortgage Insurance or PMI. This added plan guards the lender if a borrower defaults on the loan and the market price of the home is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible, PMI is pricey to a borrower. Different from a piggyback loan where the lender takes in all the costs, PMI is profitable for the lender because they collect the money, and they get paid 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 keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law states that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, smart home owners can get off the hook a little earlier. It can take many years to get to the point where the principal is only 20% of the initial amount borrowed, so it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've obtained over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be adhering to the national trends and/or your home may have secured equity before things calmed down, so even when nationwide trends indicate plunging home values, you should realize that real estate is local. The hardest thing for most homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At High Touch Appraisal Service, we know when property values have risen or declined. We're experts at analyzing value trends in Dallas, Dallas County and surrounding areas. Faced with figures from an appraiser, the mortgage company will usually drop the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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