Let Harper & Strickland, Inc. help you decide if you can get rid of your PMIWhen getting a mortgage, a 20% down payment is typically the standard. Because the risk for the lender is generally only the difference between the home value and the amount remaining on the loan, the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and typical value variationsin the event a purchaser doesn't pay. Banks were working with down payments down to 10, 5 and often 0 percent during the mortgage boom of the last decade. A lender is able to endure the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplemental plan guards the lender in case a borrower is unable to pay on the loan and the market price of the home is lower than the loan balance. PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible. It's money-making for the lender because they collect the money, and they get the money if the borrower defaults, different from a piggyback loan where the lender absorbs all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner keep from bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute home owners 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 equals only 80 percent. It can take countless years to reach the point where the principal is just 20% of the original loan amount, so it's essential to know how your home has increased in value. After all, any appreciation you've obtained over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home could have gained equity before things calmed down, so even when nationwide trends signify declining home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. It is an appraiser's job to recognize the market dynamics of their area. At Harper & Strickland, Inc., we know when property values have risen or declined. We're masters at analyzing value trends in Fairview, Collin County and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often remove the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.
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