Let Village Appraisal Ltd. help you discover if you can cancel your PMIWhen purchasing a home, a 20% down payment is typically the standard. Considering the liability for the lender is usually only the remainder between the home value and the sum remaining on the loan, the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value changeson the chance that a purchaser defaults. Banks were accepting down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender endure the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplementary plan protects the lender in case a borrower defaults on the loan and the value of the house is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible, PMI is costly to a borrower. Contradictory to a piggyback loan where the lender absorbs all the losses, PMI is favorable for the lender because they obtain 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 buyers keep from bearing the expense of PMI?With the implementation 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 equals 78 percent of the primary loan amount. The law stipulates that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, keen home owners can get off the hook a little earlier. It can take many years to get to the point where the principal is only 20% of the original amount borrowed, so it's important to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be minding the national trends and/or your home might have acquired equity before things cooled off, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above 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 Village Appraisal Ltd., we're masters at determining value trends in Lancaster, Fairfield County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will often cancel the PMI with little anxiety. At which time, the homeowner can enjoy the savings from that point on.
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