Let Warrenton Appraisal Group help you figure out if you can get rid of your PMIIt's typically understood that a 20% down payment is common when getting a mortgage. Considering the liability for the lender is usually only the difference between the home value and the sum due on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and typical value variations in the event a purchaser doesn't pay. During the mortgage upturn of the mid 2000s, it became customary to see lenders requiring 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 takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the property is lower than the balance of the loan. PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible. Contradictory to a piggyback loan where the lender consumes all the costs, PMI is profitable for the lender because they collect the money, and they get the money if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a buyer prevent bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Keen homeowners can get off the hook ahead of time. The law states that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. It can take countless years to get to the point where the principal is just 20% of the initial amount borrowed, so it's crucial to know how your home has grown in value. After all, any appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be following the national trends and/or your home could have gained equity before things simmered down, so even when nationwide trends hint at falling home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Warrenton Appraisal Group, we know when property values have risen or declined. We're masters at identifying value trends in Warrenton, Fauquier County and surrounding areas. Faced with figures from an appraiser, the mortgage company will usually remove the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
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