Let PSM Appraisals, LLC help you determine if you can cancel your PMIWhen buying a house, a 20% down payment is usually the standard. The lender's liability is generally only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and regular value changes on the chance that a borrower doesn't pay. During the recent mortgage upturn of the last decade, it became customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender in the event a borrower defaults on the loan and the value of the house is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and generally isn't even tax deductible, PMI is pricey to a borrower. It's beneficial for the lender because they secure the money, and they get the money if the borrower defaults, different from a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can keep from paying PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law designates that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. So, savvy home owners can get off the hook a little early. It can take countless years to reach the point where the principal is just 20% of the original amount borrowed, so it's crucial to know how your home has grown in value. After all, any appreciation you've achieved over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be minding the national trends and/or your home may have gained equity before things settled down, so even when nationwide trends forecast decreasing home values, you should realize that real estate is local. The hardest thing for most home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At PSM Appraisals, LLC, we know when property values have risen or declined. We're experts at determining value trends in Babylon, Suffolk County and surrounding areas. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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