Let Will Flory & Associates help you learn if you can eliminate your PMIA 20% down payment is usually the standard when purchasing a home. Since the liability for the lender is generally only the difference between the home value and the amount remaining on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and regular value variationson the chance that a borrower defaults. During the recent mortgage boom of the mid 2000s, it became customary to see lenders taking down payments of 10, 5 or often 0 percent. A lender is able to handle the additional risk of the low down payment with Private Mortgage Insurance or PMI. This additional policy covers the lender if a borrower is unable to pay on the loan and the market price of the property is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible, PMI can be expensive to a borrower. It's profitable for the lender because they secure the money, and they get paid if the borrower doesn't pay, opposite from a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, savvy homeowners can get off the hook a little early. It can take many years to get to the point where the principal is just 20% of the initial loan amount, so it's necessary to know how your home has appreciated in value. After all, any appreciation you've accomplished over the years counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things settled down, so even when nationwide trends forecast plummeting home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It is an appraiser's job to recognize the market dynamics of their area. At Will Flory & Associates, we're experts at determining value trends in Farmville, Prince Edward 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 drop the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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