Let Sun State Appraisal Services, LLC help you learn if you can cancel your PMIWhen purchasing a home, a 20% down payment is typically the standard. The lender's risk is usually only the difference between the home value and the amount outstanding on the loan, so the 20% provides a nice cushion against the expenses of foreclosure, selling the home again, and natural value fluctuations on the chance that a borrower defaults. During the recent mortgage boom of the mid 2000s, it became common to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to manage the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower defaults on the loan and the market price of the house is less than the loan balance. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible. It's lucrative for the lender because they collect the money, and they get the money if the borrower is unable to pay, contradictory to a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners keep from bearing the expense of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law stipulates that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, keen home owners can get off the hook sooner than expected. It can take countless years to get to the point where the principal is just 20% of the original amount of the loan, so it's important to know how your home has grown in value. After all, any appreciation you've acquired over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends indicate decreasing home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have gained equity before things settled down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Sun State Appraisal Services, LLC, we're masters at determining value trends in Flagler Beach, Flagler County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often cancel the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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