Let Maria Hopkins Associates help you decide if you can get rid of your PMIWhen getting a mortgage, a 20% down payment is typically the standard. Considering the liability for the lender is often only the remainder between the home value and the amount due on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and typical value fluctuationsin the event a purchaser is unable to pay. The market was working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower is unable to pay on the loan and the value 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 compiled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be pricey to a borrower. It's beneficial for the lender because they collect the money, and they get paid if the borrower is unable to pay, unlike a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer prevent bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, keen homeowners can get off the hook ahead of time. Since it can take many years to reach the point where the principal is only 20% of the initial amount of the loan, it's essential to know how your home has grown in value. After all, any appreciation you've accomplished over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home could have acquired equity before things calmed down, so even when nationwide trends indicate falling home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It's 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 experts at recognizing value trends in Spencer, Worcester County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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