Let Tight & Right Real Estate Valuation help you decide if you can cancel your PMIA 20% down payment is usually the standard when purchasing a home. Considering the liability for the lender is generally only the remainder between the home value and the amount remaining on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value variationsin the event a borrower doesn't pay. The market was taking down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender manage the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower is unable to pay on the loan and the value of the house is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be expensive to a borrower. It's advantageous for the lender because they collect the money, and they get paid if the borrower doesn't pay, 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 can home buyers prevent bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Smart homeowners can get off the hook a little earlier. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. Considering it can take countless years to arrive at the point where the principal is just 20% of the initial amount of the loan, it's crucial to know how your home has grown in value. After all, any appreciation you've gained over the years counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends signify plummeting home values, realize that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home might have gained 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. A certified, licensed real estate appraiser can surely help. It is an appraiser's job to keep up with the market dynamics of their area. At Tight & Right Real Estate Valuation, we know when property values have risen or declined. We're experts at recognizing value trends in Princeton, Union County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally eliminate the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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