Let Branch Appraisal Services, Inc help you figure out if you can get rid of your PMIA 20% down payment is typically accepted when getting a mortgage. Since the risk for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and typical value fluctuationson the chance that a purchaser defaults. During the recent mortgage upturn of the last decade, it was common to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender manage the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the worth of the property is lower than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible, PMI is costly to a borrower. Unlike a piggyback loan where the lender takes in all the losses, PMI is advantageous for the lender because they obtain the money, and they get paid 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 can home owners refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. So, wise home owners can get off the hook ahead of time. It can take many years to get to the point where the principal is just 20% of the initial amount borrowed, so it's important to know how your home has increased in value. After all, all of the appreciation you've obtained over the years counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Despite the fact that nationwide trends indicate decreasing home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have gained equity before things calmed down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It is an appraiser's job to understand the market dynamics of their area. At Branch Appraisal Services, Inc, we're experts at determining value trends in Indianapolis, Marion County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally remove the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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