Have equity in your home? Want a lower payment? An appraisal from ATX Appraisal, LLC can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. Because the liability for the lender is often only the difference between the home value and the sum remaining on the loan, the 20% provides a nice cushion against the expenses of foreclosure, selling the home again, and natural value variationson the chance that a purchaser is unable to pay. Banks were accepting 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 answer is Private Mortgage Insurance or PMI. This added policy guards the lender in case a borrower is unable to pay on the loan and the worth of the house is less than the balance of 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 costly to a borrower. Opposite from a piggyback loan where the lender absorbs all the deficits, PMI is advantageous for the lender because they collect the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home owners can avoid bearing the expense of PMIThe 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 initial loan amount. Wise 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 reaches only 80 percent. Because it can take countless years to reach the point where the principal is only 20% of the initial amount borrowed, 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 pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home could have gained equity before things simmered down, so even when nationwide trends indicate plunging home values, you should realize that real estate is local. The difficult thing for many homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At ATX Appraisal, LLC, we're experts at recognizing value trends in Austin, Travis County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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