Crescent Appraisal Group, Inc. can help you remove your Private Mortgage InsuranceA 20% down payment is typically accepted when purchasing a home. Because the risk for the lender is often only the remainder between the home value and the amount remaining on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value variationsin the event a borrower doesn't pay. Banks were accepting down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added plan covers the lender if a borrower doesn't pay on the loan and the value of the house is less than what the borrower still owes on the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. It's beneficial for the lender because they collect the money, and they get paid if the borrower doesn't pay, contradictory to a piggyback loan where the lender takes in all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law states that, upon request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. So, acute homeowners can get off the hook sooner than expected. Since it can take many years to reach the point where the principal is just 20% of the initial amount borrowed, it's necessary to know how your home has grown in value. After all, all of the appreciation you've accomplished over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends predict decreasing home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home may have secured equity before things simmered down. The hardest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At Crescent Appraisal Group, Inc., we're masters at determining value trends in Metairie, Jefferson County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little effort. At that time, the home owner can retain the savings from that point on.
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