Let Nader Appraisal Services help you decide if you can cancel your PMIWhen buying a house, a 20% down payment is typically the standard. Since the liability for the lender is usually only the remainder between the home value and the amount due on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and typical value variationsin the event a borrower is unable to pay. The market was taking down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender manage the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower doesn't pay on the loan and the market price of the house is less than what is owed on the loan. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible. Separate from a piggyback loan where the lender absorbs all the damages, PMI is money-making for the lender because they secure the money, and they receive payment 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 buyers avoid bearing the expense of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically stop the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law states that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, smart home owners can get off the hook ahead of time. It can take many years to get to the point where the principal is just 20% of the initial amount of the loan, so it's important to know how your home has grown in value. After all, every bit of appreciation you've achieved over time counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not be heeding the national trends and/or your home could have acquired equity before things cooled off, so even when nationwide trends predict declining home values, you should understand that real estate is local. The difficult thing for most home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At Nader Appraisal Services, we're masters at analyzing value trends in Canton, Stark County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often do away with the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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