Let Paragon Valuations, LLC help you determine if you can cancel your PMIWhen getting a mortgage, a 20% down payment is typically the standard. The lender's liability is usually only the difference between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and regular value variations on the chance that a borrower doesn't pay. During the recent mortgage upturn of the last decade, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This added plan covers the lender in the event a borrower doesn't pay on the loan and the worth of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be expensive to a borrower. It's profitable for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, 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 a buyer prevent bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, acute homeowners can get off the hook a little early. Since it can take many years to get to the point where the principal is only 20% of the initial amount of the loan, it's important to know how your home has grown in value. After all, every bit of appreciation you've gained 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? Even when nationwide trends signify declining home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home could have secured equity before things calmed down. The hardest 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 surely help. It is an appraiser's job to understand the market dynamics of their area. At Paragon Valuations, LLC, we know when property values have risen or declined. We're experts at analyzing value trends in Hampton, Clayton County and surrounding areas. Faced with information from an appraiser, the mortgage company will often drop the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
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