Let Mark Schofield Appraisal Services help you discover if you can cancel your PMIIt's widely inferred that a 20% down payment is common when getting a mortgage. The lender's risk is usually only the difference between the home value and the amount outstanding on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and natural value variations in the event a purchaser doesn't pay. Lenders were taking down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender handle the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This additional policy protects the lender in the event a borrower is unable to pay on the loan and the value of the property is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. Unlike a piggyback loan where the lender takes in all the deficits, PMI is lucrative for the lender because they collect the money, and they get the money if the borrower is unable to pay. 
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 bearing the expense of PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law states that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, smart home owners can get off the hook sooner than expected. It can take countless years to reach the point where the principal is only 20% of the original amount borrowed, so it's essential to know how your home has grown in value. After all, all of the appreciation you've achieved over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends predict plummeting home values, understand that real estate is local. Your neighborhood might not be following the national trends and/or your home may have acquired equity before things cooled off. The toughest thing for most homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to understand the market dynamics of our area. At Mark Schofield Appraisal Services , we're masters at recognizing value trends in St Johns, Saint Johns 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 generally remove the PMI with little anxiety. At that time, the homeowner can enjoy the savings from that point on.
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