Let R & R Real Estate Solutions help you discover if you can get rid of your PMIWhen purchasing a home, a 20% down payment is usually the standard. Since the risk for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% provides a nice buffer against the costs of foreclosure, reselling the home, and regular value variationson the chance that a purchaser defaults. The market was working with down payments down to 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender endure the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower doesn't pay on the loan and the market price of the house is less than the balance of the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the deficits, PMI is favorable for the lender because they secure the money, and they get the money 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 a homeowner keep from paying PMI?The Homeowners Protection Act of 1998 makes 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 guarantees that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, keen home owners can get off the hook ahead of time. Since it can take countless years to arrive at the point where the principal is only 20% of the original loan amount, it's important to know how your home has appreciated in value. After all, every bit of appreciation you've obtained over time counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be adopting 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. The toughest thing for almost all home owners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At R & R Real Estate Solutions, we know when property values have risen or declined. We're experts at recognizing value trends in La Vernia, Wilson County and surrounding areas. Faced with information from an appraiser, the mortgage company will often remove the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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