Harper & Strickland, Inc. can help you remove your Private Mortgage InsuranceIt's typically inferred that a 20% down payment is common when buying a house. The lender's liability is oftentimes only the difference between the home value and the amount outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value changes in the event a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it became widespread to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender endure the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the worth of the house is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible, PMI can be pricey to a borrower. It's lucrative for the lender because they collect the money, and they receive payment if the borrower doesn't pay, unlike a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can refrain from paying 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 equals 78 percent of the initial loan amount. The law guarantees that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, acute homeowners can get off the hook sooner than expected. 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 increased in value. After all, any appreciation you've obtained over the years counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends signify plummeting home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home might have gained equity before things simmered down. The hardest thing for almost all home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to understand the market dynamics of their area. At Harper & Strickland, Inc., we know when property values have risen or declined. We're masters at determining value trends in Fairview, Collin County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often remove the PMI with little anxiety. At which time, the homeowner can retain the savings from that point on.
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