Have equity in your home? Want a lower payment? An appraisal from Mike Humfleet Appraisal Service can help you get rid of your PMI.It's widely understood that a 20% down payment is common when purchasing a home. Since the liability for the lender is often only the remainder between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and typical value changesin the event 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. How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower is unable to pay on the loan and the worth of the home is lower than what the borrower still owes on the loan. PMI can be pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. Contradictory to a piggyback loan where the lender consumes all the damages, PMI is profitable for the lender because they secure the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law pledges that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, wise homeowners can get off the hook ahead of time. Considering it can take countless years to get to the point where the principal is only 20% of the initial amount of the loan, it's important to know how your home has increased in value. After all, every bit of appreciation you've obtained over the years counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not be following the national trends and/or your home might have secured equity before things calmed down, so even when nationwide trends predict plummeting home values, you should understand that real estate is local. The difficult thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. It is an appraiser's job to know the market dynamics of their area. At Mike Humfleet Appraisal Service, we know when property values have risen or declined. We're experts at recognizing value trends in London, Laurel County and surrounding areas. When faced with figures from an appraiser, the mortgage company will most often do away with the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
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