Let John Fanning & Associates help you discover if you can eliminate your PMIIt's widely inferred that a 20% down payment is accepted when buying a house. Considering the liability for the lender is usually only the difference between the home value and the sum remaining on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and natural value variationsin the event a borrower is unable to pay. Banks were accepting down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. A lender is able to endure the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This additional plan guards the lender in the event a borrower is unable to pay on the loan and the market price of the home is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender takes in all the damages, PMI is beneficial for the lender because they obtain the money, and they receive payment 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 home owners can keep from bearing the cost of PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute homeowners can get off the hook ahead of time. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. It can take many years to reach the point where the principal is just 20% of the initial amount of the loan, so it's crucial to know how your home has grown in value. After all, all of the appreciation you've achieved over time counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home may have secured equity before things settled down, so even when nationwide trends forecast plunging home values, you should understand that real estate is local. The toughest thing for many homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. It is an appraiser's job to know the market dynamics of their area. At John Fanning & Associates, we're experts at pinpointing value trends in Abilene, Taylor County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually drop the PMI with little anxiety. At which time, the home owner can enjoy the savings from that point on.
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