Crescent Appraisal Group, Inc. can help you remove your Private Mortgage Insurance

It's widely inferred that a 20% down payment is accepted when getting a mortgage. Since the risk for the lender is oftentimes only the difference between the home value and the amount remaining on the loan, the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and typical value variationson the chance that a purchaser doesn't pay.

Banks were working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the additional risk of the low down payment with Private Mortgage Insurance or PMI. This supplemental policy takes care of the lender in the event a borrower doesn't pay on the loan and the value of the house is less than the loan balance.

Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI is pricey to a borrower. It's money-making for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, contradictory to a piggyback loan where the lender consumes all the deficits.

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 paying PMI

The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute home owners can get off the hook a little earlier. The law states that, at the request of the homeowner, the PMI must be released when the principal amount equals just 80 percent.

It can take countless years to reach the point where the principal is just 20% of the original loan amount, so it's necessary to know how your home has appreciated in value. After all, any appreciation you've acquired over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends hint at plunging home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home could have acquired equity before things calmed 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 difficult thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Crescent Appraisal Group, Inc., we're experts at determining value trends in Metairie, Jefferson 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 cancel the PMI with little trouble. At that time, the home owner can relish the savings from that point on.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year