Let Dan Dillon help you determine if you can get rid of your PMIA 20% down payment is typically the standard when buying a house. The lender's risk is oftentimes only the remainder between the home value and the amount remaining on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, selling the home again, and natural value variations in the event a purchaser is unable to pay. During the recent mortgage boom of the last decade, it became customary to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender handle the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This additional policy guards the lender in the event a borrower doesn't pay on the loan and the worth of the home is less than what is owed on the loan. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible. It's beneficial for the lender because they collect the money, and they receive payment if the borrower defaults, separate from a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers avoid paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, keen home owners can get off the hook a little early. Since it can take many years to arrive at the point where the principal is just 20% of the original amount of the loan, it's essential to know how your home has increased in value. After all, any appreciation you've achieved over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends forecast plummeting home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have gained equity before things cooled off. The toughest 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 certainly help. It is an appraiser's job to recognize the market dynamics of their area. At Dan Dillon, we're masters at determining value trends in Wilmington, New Hanover County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will often cancel the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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