Let Daniels Appraisals help you discover if you can cancel your PMIIt's generally understood that a 20% down payment is common when purchasing a home. Considering the liability for the lender is generally only the difference between the home value and the amount remaining on the loan, the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and typical value changesin the event a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or even 0 percent. A lender is able to endure the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This additional policy guards the lender in case a borrower doesn't pay on the loan and the market price of the property is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. Opposite from a piggyback loan where the lender takes in all the deficits, PMI is money-making for the lender because they acquire the money, and they receive payment 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 can homeowners refrain from paying PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Keen homeowners can get off the hook a little earlier. The law guarantees that, at the request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. Considering it can take many years to reach the point where the principal is only 20% of the initial loan amount, it's essential to know how your home has grown in value. After all, any appreciation you've obtained over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not be reflecting the national trends and/or your home might have acquired equity before things calmed down, so even when nationwide trends forecast plummeting home values, you should understand that real estate is local. The hardest thing for most home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. It's an appraiser's job to keep up with the market dynamics of their area. At Daniels Appraisals, we're experts at determining value trends in Oklahoma City, Oklahoma County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.
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