Luke Calamari Appraisal Services can help you remove your Private Mortgage InsuranceWhen getting a mortgage, a 20% down payment is typically the standard. Since the liability for the lender is usually only the difference between the home value and the sum outstanding on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuationson the chance that a borrower is unable to pay. The market was accepting down payments down to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower defaults on the loan and the worth of the house is less than the loan balance. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible. Opposite from a piggyback loan where the lender consumes all the damages, PMI is favorable for the lender because they secure the money, and they get paid 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 homebuyers refrain from paying 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 equals 78 percent of the beginning loan amount. Acute home owners can get off the hook beforehand. The law guarantees that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. It can take countless years to get to the point where the principal is just 20% of the initial loan amount, so it's crucial to know how your home has grown in value. After all, all of the appreciation you've achieved over the years counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends hint at plummeting home values, realize that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things simmered down. The toughest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to know the market dynamics of our area. At Luke Calamari Appraisal Services, we know when property values have risen or declined. We're masters at analyzing value trends in Slidell, Saint Tammany County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.
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