Southern Star Real Estate Services can help you remove your Private Mortgage InsuranceA 20% down payment is typically the standard when buying a house. Since the risk for the lender is usually only the remainder between the home value and the sum remaining on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and typical value changesin the event a borrower is unable to pay. During the recent mortgage upturn of the last decade, it became widespread to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender handle the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower doesn't pay on the loan and the worth of the property is less than the loan balance. PMI is costly to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. Separate from a piggyback loan where the lender consumes all the deficits, PMI is beneficial for the lender because they collect 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 home owner avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. So, smart homeowners can get off the hook a little earlier. It can take many years to reach the point where the principal is just 20% of the initial amount borrowed, so it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've obtained over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Even when nationwide trends predict decreasing home values, be aware that real estate is local. Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things cooled off. The hardest thing for almost all home owners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to recognize the market dynamics of their area. At Southern Star Real Estate Services, we know when property values have risen or declined. We're masters at analyzing value trends in Powder Springs, Paulding County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually drop the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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