Let MAK Appraisal Group, Inc help you discover if you can eliminate your PMIA 20% down payment is typically accepted when purchasing a home. Considering the liability for the lender is generally only the difference between the home value and the amount due on the loan, the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and regular value changeson the chance that a borrower doesn't pay. During the recent mortgage upturn of the last decade, it became customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the small down payment with Private Mortgage Insurance or PMI. This additional policy covers the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. It's beneficial for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, opposite from a piggyback loan where the lender absorbs 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 owners avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Wise homeowners can get off the hook beforehand. The law states that, at the request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. Since it can take countless years to get to the point where the principal is just 20% of the original amount borrowed, it's essential to know how your home has grown 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 your loan balance has dropped below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home could have secured equity before things simmered down, so even when nationwide trends hint at plunging home values, you should understand that real estate is local. An accredited, certified real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It's an appraiser's job to know the market dynamics of their area. At MAK Appraisal Group, Inc, we're experts at identifying value trends in Southeastern Pennsylvania and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At that time, the home owner can enjoy the savings from that point on.
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