Have equity in your home? Want a lower payment? An appraisal from Todd Ligon (512) 784-9022 can help you get rid of your PMI.It's typically known that a 20% down payment is accepted when purchasing a home. Since the liability for the lender is generally only the difference between the home value and the sum outstanding on the loan, the 20% supplies a nice cushion against the costs of foreclosure, reselling the home, and regular value changeson the chance that a borrower defaults. Lenders were taking down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender manage the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than what is owed on the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the damages, PMI is profitable for the lender because they collect the money, and they get the money if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners keep from paying PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute home owners can get off the hook a little early. The law designates that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take countless years to get to the point where the principal is only 20% of the original amount borrowed, so it's important to know how your home has appreciated in value. After all, any appreciation you've accomplished over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends hint at falling home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home might have secured equity before things calmed down. The difficult thing for most homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to know the market dynamics of their area. At Todd Ligon (512) 784-9022, we know when property values have risen or declined. We're masters at analyzing value trends in Austin, Travis County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
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