Let Allstate Appraisal Group help you determine if you can get rid of your PMI

When buying a house, a 20% down payment is typically the standard. Since the liability for the lender is usually only the difference between the home value and the amount due on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and regular value variations on the chance that a borrower doesn't pay.

During the recent mortgage boom that our country recently experienced, it was customary to see lenders reducing down payments to 10, 5, 3 or even 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower defaults on the loan and the market price of the property is lower than what the borrower still owes on the loan.

PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible. It's money-making for the lender because they collect the money, and they get paid if the borrower is unable to pay, different from a piggyback loan where the lender absorbs all the deficits.


	Does your monthly mortgage payment have a lineitem for PMI? Call Allstate Appraisal Group today at 3083449230 or send us an e-mail. A recent appraisal could save you thousands.

How can buyers prevent bearing the cost of PMI?

The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Savvy home owners can get off the hook beforehand. The law states that, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent.

It can take several years to reach the point where the principal is only 80% of the original loan amount, so it's crucial to know how your Nebraska home has increased in value. After all, any appreciation you've accomplished over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Even when nationwide trends indicate decreasing home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home may have secured equity before things simmered down.

The difficult thing for many people to figure out is just when their home's equity goes over the 20% point. An accredited, Nebraska licensed real estate appraiser can definitely help. It's an appraiser's job to recognize the market dynamics of their area. At Allstate Appraisal Group, we're masters at analyzing value trends in McCook, Red Willow County, and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.


	Did you secure your mortgage with less than 20% down? Call Allstate Appraisal Group today at 3083449230. You may be able to save money by removing your Private Mortgage Insurance premium.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year