Let Violet Valuations help you determine if you can get rid of your PMIIt's largely understood that a 20% down payment is common when buying a house. The lender's liability is oftentimes only the remainder between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and regular value variations in the event a borrower is unable to pay. The market was taking down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplementary plan takes care of the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible, PMI is pricey to a borrower. Different from a piggyback loan where the lender consumes all the costs, PMI is lucrative for the lender because they obtain the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can keep from bearing the cost of PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. So, keen homeowners can get off the hook sooner than expected. Because it can take countless years to get to the point where the principal is only 20% of the original amount borrowed, it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've gained over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home could have acquired equity before things calmed down, so even when nationwide trends signify declining home values, you should realize that real estate is local. The toughest thing for most home owners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to know the market dynamics of our area. At Violet Valuations, we're experts at recognizing value trends in Rockledge, Brevard County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will usually drop the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.
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