Furr Appraisal Service can help you remove your Private Mortgage InsuranceWhen getting a mortgage, a 20% down payment is usually the standard. Since the liability for the lender is often only the difference between the home value and the sum due on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and regular value fluctuationson the chance that a purchaser defaults. Lenders were accepting down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added policy takes care of the lender in case a borrower is unable to pay on the loan and the value of the property is lower than what the borrower still owes on the loan. PMI can be pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. It's favorable for the lender because they obtain the money, and they get paid if the borrower doesn't pay, separate from a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can prevent paying PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law guarantees that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, smart homeowners can get off the hook a little earlier. It can take many years to arrive at the point where the principal is only 20% of the original amount borrowed, so it's crucial to know how your home has appreciated in value. After all, any appreciation you've achieved over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home may have secured equity before things settled down, so even when nationwide trends hint at decreasing home values, you should realize that real estate is local. The difficult thing for most homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to understand the market dynamics of our area. At Furr Appraisal Service, we know when property values have risen or declined. We're masters at analyzing value trends in Camden, Benton County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often do away with the PMI with little anxiety. At that time, the homeowner can enjoy the savings from that point on.
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