Let Appraisals by Kana help you decide if you can eliminate your PMIIt's typically known that a 20% down payment is the standard when buying a house. The lender's liability is usually only the difference between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value variations on the chance that a borrower is unable to pay. Lenders were taking down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower is unable to pay on the loan and the value of the property is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender takes in all the damages, PMI is money-making for the lender because they acquire the money, and they receive payment 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 buyers refrain from bearing the expense of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law guarantees that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, smart home owners can get off the hook a little early. 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 grown in value. After all, any appreciation you've gained over the years counts towards dismissing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home could have gained equity before things cooled off, so even when nationwide trends signify decreasing home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help homeowners 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 Appraisals by Kana, we're masters at analyzing value trends in Lafayette, Lafayette County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often eliminate the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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