Let B & B Valuations, LLC help you figure out if you can cancel your PMIWhen purchasing a home, a 20% down payment is typically the standard. The lender's liability is generally only the remainder between the home value and the amount outstanding on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and typical value variations on the chance that a purchaser defaults. The market was accepting down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower doesn't pay on the loan and the market price of the house is less than what the borrower still owes on the loan. PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender takes in all the losses, PMI is lucrative for the lender because they secure the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners keep from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Acute home owners can get off the hook beforehand. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to get to the point where the principal is only 20% of the initial amount of the loan, so it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've gained over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be adhering to the national trends and/or your home could have gained equity before things cooled off, so even when nationwide trends signify declining 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 difficult thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At B & B Valuations, LLC, we know when property values have risen or declined. We're masters at determining value trends in Katy, Fort Bend County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually remove the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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