Let Slater Real Estate Services help you figure out if you can get rid of your PMIA 20% down payment is usually the standard when getting a mortgage. Considering the risk for the lender is usually only the difference between the home value and the sum outstanding on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and typical value fluctuationson the chance that a purchaser is unable to pay. Banks were working with down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. A lender is able to endure the added risk of the small down payment with Private Mortgage Insurance or PMI. This additional plan takes care of the lender in the event a borrower defaults on the loan and the market price of the house is less than the balance of the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. It's lucrative for the lender because they obtain the money, and they get paid if the borrower doesn't pay, contradictory to 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 a buyer refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Savvy homeowners can get off the hook a little earlier. The law states that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. It can take countless years to arrive at the point where the principal is just 20% of the original amount borrowed, so it's essential to know how your home has increased in value. After all, every bit of appreciation you've achieved over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be reflecting the national trends and/or your home may have secured equity before things cooled off, so even when nationwide trends indicate plummeting home values, you should understand that real estate is local. The difficult thing for many homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. It's an appraiser's job to keep up with the market dynamics of their area. At Slater Real Estate Services, we're experts at identifying value trends in Windsor, Weld County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often do away with the PMI with little trouble. At that time, the homeowner can retain the savings from that point on.
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