Have equity in your home? Want a lower payment? An appraisal from Karen A. Zirpoli - KAZ Appraisals, LLC can help you get rid of your PMI.

When getting a mortgage, a 20% down payment is usually the standard. Considering the liability for the lender is generally only the difference between the home value and the sum due on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and typical value changeson the chance that a purchaser doesn't pay.

The market was working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. This additional policy takes care of the lender if a borrower defaults on the loan and the market price of the home is lower than what is owed on the loan.

PMI is costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible. It's profitable for the lender because they secure the money, and they get the money if the borrower doesn't pay, contradictory to a piggyback loan where the lender absorbs all the costs.

Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.

How home buyers can keep from bearing the expense of PMI

With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute homeowners can get off the hook beforehand. The law promises that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent.

Since it can take countless years to reach the point where the principal is just 20% of the original amount of the loan, it's necessary to know how your home has increased in value. After all, all of the appreciation you've accomplished over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends indicate falling home values, understand that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home might have secured equity before things calmed down.

The toughest thing for most homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to know the market dynamics of their area. At Karen A. Zirpoli - KAZ Appraisals, LLC, we know when property values have risen or declined. We're masters at identifying value trends in Nokesville, Prince William County and surrounding areas. When faced with information from an appraiser, the mortgage company will often remove the PMI with little anxiety. At which time, the homeowner can enjoy the savings from that point on.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year

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