Let APC Appraisals LLC help you decide if you can eliminate your PMIA 20% down payment is typically accepted when purchasing a home. The lender's risk is generally only the difference between the home value and the sum outstanding on the loan, so the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and typical value variations in the event a borrower defaults. During the recent mortgage upturn of the last decade, it became common to see lenders requiring down payments of 10, 5 or often 0 percent. How does a lender handle the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower doesn't pay on the loan and the value of the house is less than the loan balance. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. It's profitable for the lender because they acquire the money, and they get paid if the borrower is unable to pay, separate from a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers keep from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Savvy homeowners can get off the hook beforehand. The law stipulates that, at the request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. It can take countless years to reach the point where the principal is just 20% of the initial amount of the loan, so it's crucial to know how your home has appreciated in value. After all, any appreciation you've acquired over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends forecast declining home values, be aware that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home might have secured equity before things calmed down. The hardest thing for most home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At APC Appraisals LLC, we know when property values have risen or declined. We're experts at identifying value trends in Mint Hill, Mecklenburg County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually drop the PMI with little effort. At that time, the homeowner can enjoy the savings from that point on.
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