Let R.M. Conrad & Associates, Inc. help you learn if you can get rid of your PMIA 20% down payment is usually accepted when getting a mortgage. Considering the risk for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and regular value changeson the chance that a purchaser defaults. Banks were taking down payments down to 10, 5 and often 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 added policy covers the lender in case a borrower defaults on the loan and the market price of the house is lower than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and generally isn't even tax deductible, PMI is pricey to a borrower. It's profitable for the lender because they obtain the money, and they get paid if the borrower defaults, unlike a piggyback loan where the lender takes in all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers avoid paying PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise home owners can get off the hook a little early. The law guarantees that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. It can take countless years to get to the point where the principal is only 20% of the initial amount of the loan, so it's necessary to know how your home has grown in value. After all, any appreciation you've achieved over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends predict falling home values, realize that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home may have gained equity before things calmed down. The toughest thing for many homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to understand the market dynamics of our area. At R.M. Conrad & Associates, Inc., we're experts at analyzing value trends in West Chester, Chester County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often eliminate the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
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