Live Colorado Appraisals can help you remove your Private Mortgage InsuranceIt's largely known that a 20% down payment is accepted when buying a house. The lender's liability is generally only the remainder between the home value and the sum due on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and typical value variations in the event a borrower is unable to pay. Banks were accepting down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower doesn't pay on the loan and the value of the house is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and many times isn't even tax deductible, PMI is costly to a borrower. Opposite from a piggyback loan where the lender takes in all the damages, PMI is lucrative for the lender because they collect the money, and they receive payment if the borrower doesn't pay. 
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 refrain from bearing the cost of PMI?With the utilization 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 primary loan amount. Wise home owners can get off the hook a little earlier. The law promises that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 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 important to know how your home has increased in value. After all, all of the appreciation you've accomplished over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home may have gained equity before things calmed down, so even when nationwide trends predict plummeting home values, you should realize that real estate is local. An accredited, licensed 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. As appraisers, it's our job to recognize the market dynamics of our area. At Live Colorado Appraisals, we're experts at determining value trends in Monument, 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 usually remove the PMI with little anxiety. At that time, the homeowner can enjoy the savings from that point on.
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