Maria Hopkins Associates can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. The lender's risk is oftentimes only the difference between the home value and the amount due on the loan, so the 20% adds a nice buffer against the charges of foreclosure, selling the home again, and regular value variations on the chance that a purchaser doesn't pay. The market was working with down payments down to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender if a borrower is unable to pay on the loan and the market price of the house is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. Contradictory to a piggyback loan where the lender consumes all the deficits, PMI is beneficial for the lender because they obtain the money, and they get paid 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 homeowners keep from bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, smart homeowners can get off the hook sooner than expected. It can take many years to arrive at the point where the principal is only 20% of the initial amount borrowed, so it's necessary to know how your home has appreciated in value. After all, any appreciation you've obtained over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home could have gained equity before things simmered down, so even when nationwide trends indicate plummeting home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to understand the market dynamics of their area. At Maria Hopkins Associates, we know when property values have risen or declined. We're masters at analyzing value trends in Spencer, Worcester County and surrounding areas. When faced with data from an appraiser, the mortgage company will usually eliminate the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
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