Let SWFL Residential Appraisal Services, LLC. help you figure out if you can cancel your PMIIt's widely understood that a 20% down payment is common when buying a house. Since the liability for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and typical value fluctuationsin the event a borrower doesn't pay. The market was working with down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the small down payment? The answer 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 lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible, PMI can be costly to a borrower. It's advantageous for the lender because they collect the money, and they get paid if the borrower defaults, different from a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer refrain from bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law designates 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 a little early. It can take countless years to arrive at the point where the principal is only 20% of the original amount of the loan, so it's crucial to know how your home has grown in value. After all, all of the appreciation you've gained over time counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends indicate plunging home values, understand that real estate is local. Your neighborhood might not be following the national trends and/or your home may have secured equity before things cooled off. The hardest thing for most homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to understand the market dynamics of their area. At SWFL Residential Appraisal Services, LLC., we know when property values have risen or declined. We're experts at analyzing value trends in Fort Myers, Lee County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. At which time, the homeowner can enjoy the savings from that point on.
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