Let Stine Appraisal Services help you decide if you can get rid of your PMIIt's generally known that a 20% down payment is common when purchasing a home. Because the liability for the lender is oftentimes only the remainder between the home value and the sum due on the loan, the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and natural value fluctuationson the chance that a borrower is unable to pay. The market was taking down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplementary plan protects the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than what is owed on the loan. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible. Separate from a piggyback loan where the lender consumes all the losses, PMI is beneficial for the lender because they collect the money, and they get the money if the borrower doesn't pay. 
Contact us, you may be able to save money by removing your PMI. How can a homeowner keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Wise home owners can get off the hook a little early. The law pledges that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. It can take many years to reach the point where the principal is just 20% of the original loan amount, so it's crucial to know how your home has grown in value. After all, every bit of appreciation you've obtained over time counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends signify declining home values, realize that real estate is local. Your neighborhood might not be following the national trends and/or your home might have gained equity before things simmered down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to know the market dynamics of their area. At Stine Appraisal Services Inc., we're masters at determining value trends in Brentwood, Williamson County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will usually drop the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
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