Let Tim Norris & Associates help you decide if you can cancel your PMIWhen getting a mortgage, a 20% down payment is usually the standard. The lender's risk is often only the remainder between the home value and the amount due on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and natural value variations in the event a borrower is unable to pay. The market was accepting down payments down to 10, 5 and often 0 percent during the mortgage boom of the last decade. A lender is able to manage the added risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower doesn't pay on the loan and the value of the house is lower than what is owed on the loan. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible. Opposite from a piggyback loan where the lender takes in all the damages, PMI is profitable for the lender because they acquire 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 homeowners can prevent paying PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute homeowners can get off the hook beforehand. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is only 20% of the original amount of the loan, so it's necessary to know how your home has grown in value. After all, any appreciation you've achieved over time counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends predict decreasing home values, be aware that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home may have secured equity before things cooled off. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Tim Norris & Associates, we're experts at determining value trends in Huntertown, Allen County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will often remove the PMI with little effort. At that time, the homeowner can retain the savings from that point on.
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