Let Kelley Group help you figure out if you can eliminate your PMIA 20% down payment is typically the standard when purchasing a home. Considering the liability for the lender is oftentimes only the remainder between the home value and the amount remaining on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and typical value changeson the chance that a borrower defaults. During the recent mortgage upturn of the last decade, it was common to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender endure the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower doesn't pay on the loan and the worth of the house is lower than the balance of the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and oftentimes isn't even tax deductible. It's lucrative 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 homebuyers can keep from bearing the expense of PMIWith the employment of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Acute home owners can get off the hook beforehand. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. It can take many years to get to the point where the principal is only 20% of the initial loan amount, so it's essential to know how your home has increased in value. After all, every bit of appreciation you've accomplished over the years counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home might have gained equity before things settled down, so even when nationwide trends forecast decreasing home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to understand the market dynamics of their area. At Kelley Group, we're experts at recognizing value trends in Atlanta, Fulton County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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