Let Columbus Appraisal Company, LLC help you determine if you can cancel your PMIIt's largely known that a 20% down payment is accepted when getting a mortgage. Considering the risk for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and regular value fluctuationsin the event a purchaser defaults. During the recent mortgage boom of the mid 2000s, it was widespread to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the worth of the house is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. Different from a piggyback loan where the lender absorbs all the losses, PMI is advantageous for the lender because they secure the money, and they get paid 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?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Smart homeowners can get off the hook beforehand. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is just 20% of the initial amount of the loan, so it's necessary to know how your home has grown in value. After all, any appreciation you've achieved over time counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be adopting the national trends and/or your home could have gained equity before things calmed down, so even when nationwide trends indicate decreasing home values, you should understand that real estate is local. The toughest thing for almost all home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Columbus Appraisal Company, LLC, we're experts at determining value trends in Columbus, Franklin County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally drop the PMI with little effort. At which time, the home owner can relish the savings from that point on.
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