Timothy Crann & Co., LLC can help you remove your Private Mortgage InsuranceIt's generally understood that a 20% down payment is accepted when buying a house. Because the risk for the lender is often only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and typical value fluctuationsin the event a purchaser defaults. During the recent mortgage upturn of the last decade, it became common to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to endure the added risk of the low down payment with Private Mortgage Insurance or PMI. This additional plan protects the lender in the event a borrower defaults on the loan and the worth of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible, PMI can be pricey to a borrower. Contradictory to a piggyback loan where the lender absorbs all the costs, PMI is money-making for the lender because they collect the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law designates that, at the request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, keen homeowners can get off the hook a little earlier. It can take many years to arrive at the point where the principal is just 20% of the initial amount borrowed, so it's essential to know how your home has increased in value. After all, all of the appreciation you've acquired over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends hint at plummeting home values, understand that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have secured equity before things settled down. 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 hard thing to know. As appraisers, it's our job to know the market dynamics of our area. At Timothy Crann & Co., LLC, we know when property values have risen or declined. We're masters at identifying value trends in Media, Delaware County and surrounding areas. When faced with information from an appraiser, the mortgage company will often do away with the PMI with little effort. At that time, the homeowner can enjoy the savings from that point on.
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