Let Meyer Lane Appraisals help you determine if you can get rid of your PMIIt's widely understood that a 20% down payment is the standard when purchasing a home. The lender's liability is usually only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and natural value fluctuations on the chance that a purchaser is unable to pay. The market was taking 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 increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This added policy takes care of the lender if a borrower is unable to pay on the loan and the market price of the home is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI is pricey to a borrower. Separate from a piggyback loan where the lender takes in all the costs, PMI is profitable for the lender because they obtain the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can avoid paying PMIThe Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law stipulates that, upon request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. So, acute homeowners can get off the hook a little early. Because it can take many years to get to 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, every bit of appreciation you've accomplished over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends signify plunging home values, understand that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have gained equity before things simmered down. The difficult thing for many homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Meyer Lane Appraisals, we're masters at pinpointing value trends in Hatboro, Montgomery County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often cancel the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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