Have equity in your home? Want a lower payment? An appraisal from Martindale Appraisal Services can help you get rid of your PMI.It's largely inferred that a 20% down payment is the standard when getting a mortgage. The lender's liability is usually only the difference between the home value and the amount outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value variations in the event a borrower defaults. Banks were taking down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender in the event a borrower defaults on the loan and the value of the property is less than the loan balance. PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the deficits, PMI is advantageous for the lender because they obtain the money, and they get paid 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 homeowners can avoid paying PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Savvy homeowners can get off the hook sooner than expected. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the original amount borrowed, so it's essential to know how your home has increased in value. After all, all of the appreciation you've obtained 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 forecast falling home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have gained equity before things settled down. The hardest thing for many 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 understand the market dynamics of our area. At Martindale Appraisal Services, we're experts at analyzing value trends in Mc Lean, McLean County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will usually drop the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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