Let BTR Appraisal Services help you figure out if you can get rid of your PMIA 20% down payment is typically accepted when buying a house. Because the risk for the lender is oftentimes only the remainder between the home value and the sum due on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and typical value fluctuationson the chance that a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it was common to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to handle the increased risk of the low down payment with Private Mortgage Insurance or PMI. PMI protects the lender if a borrower is unable to pay on the loan and the value of the house is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI is pricey to a borrower. Contradictory to a piggyback loan where the lender consumes all the losses, PMI is profitable for the lender because they collect the money, and they get paid 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 home owner keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, wise homeowners can get off the hook sooner than expected. Considering it can take many years to arrive at the point where the principal is only 20% of the initial loan amount, it's essential to know how your home has grown in value. After all, any appreciation you've accomplished over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be reflecting the national trends and/or your home might have acquired equity before things calmed down, so even when nationwide trends indicate plummeting home values, you should understand that real estate is local. The difficult thing for many homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. It's an appraiser's job to know the market dynamics of their area. At BTR Appraisal Services, we know when property values have risen or declined. We're masters at identifying value trends in Bridgeville, Sussex County and surrounding areas. Faced with data from an appraiser, the mortgage company will generally drop the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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