Let Colorado Front Range Appraisals help you figure out if you can cancel your PMIA 20% down payment is typically accepted when getting a mortgage. Considering the liability for the lender is usually only the difference between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and natural value fluctuationson the chance that a borrower doesn't pay. Lenders were working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the increased risk of the low down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the value of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible, PMI is pricey to a borrower. Unlike a piggyback loan where the lender takes in all the losses, PMI is beneficial for the lender because they secure the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law guarantees that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, smart home owners can get off the hook a little earlier. Considering it can take countless years to reach the point where the principal is just 20% of the initial amount of the loan, it's necessary to know how your home has grown in value. After all, every bit of appreciation you've gained over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things cooled off, so even when nationwide trends predict plummeting home values, you should realize that real estate is local. The difficult thing for almost all homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. It is an appraiser's job to understand the market dynamics of their area. At Colorado Front Range Appraisals, we're experts at analyzing value trends in Colorado Springs, El Paso County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will often do away with the PMI with little effort. At which time, the home owner can relish the savings from that point on.
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