Let Southern Star Real Estate Services help you discover if you can get rid of your PMIIt's generally understood that a 20% down payment is common when purchasing a home. Since the risk for the lender is usually only the difference between the home value and the amount remaining on the loan, the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and regular value fluctuationson the chance that a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it became customary to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender manage the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy takes care of the lender in the event a borrower is unable to pay on the loan and the worth of the property is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible, PMI can be pricey to a borrower. Opposite from a piggyback loan where the lender consumes all the losses, PMI is profitable for the lender because they secure the money, and they get the money if the borrower defaults. 
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 forces the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law guarantees that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, wise homeowners can get off the hook a little early. Considering it can take many years to reach the point where the principal is only 20% of the original amount borrowed, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends forecast plummeting home values, be aware that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home may have acquired equity before things simmered down. The hardest thing for almost all homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to understand the market dynamics of our area. At Southern Star Real Estate Services, we know when property values have risen or declined. We're masters at pinpointing value trends in Powder Springs, Paulding County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often cancel the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
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