PSM Appraisals, LLC can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is typically the standard. Because the risk for the lender is oftentimes only the remainder between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the charges of foreclosure, reselling the home, and typical value changesin the event a borrower defaults. The market was taking down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy covers the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI is costly to a borrower. It's lucrative for the lender because they obtain the money, and they get the money if the borrower doesn't pay, different from a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer refrain from bearing the expense of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Acute home owners can get off the hook sooner than expected. The law states that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. It can take countless years to get to the point where the principal is just 20% of the initial amount of the loan, so it's essential to know how your home has grown in value. After all, all of the appreciation you've obtained over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends indicate plummeting home values, understand that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home may 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 tough thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At PSM Appraisals, LLC, we're masters at identifying value trends in Babylon, Suffolk County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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