Let Prestige Real Estate Services, LLC help you determine if you can get rid of your PMIA 20% down payment is usually the standard when purchasing a home. Considering the risk for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and typical value changesin the event a purchaser doesn't pay. The market was taking down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender handle the added risk of the small down payment? The solution is 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 is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible, PMI can be expensive to a borrower. Opposite from a piggyback loan where the lender takes in all the losses, PMI is favorable for the lender because they acquire the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner prevent bearing the expense of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Wise home owners can get off the hook a little earlier. The law pledges that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. Because it can take countless years to get to the point where the principal is just 20% of the original amount of the loan, it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over the years counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends forecast plunging home values, be aware that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have secured equity before things cooled off. The toughest thing for almost all homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to understand the market dynamics of our area. At Prestige Real Estate Services, LLC, we're masters at analyzing value trends in Succasunna, Morris County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often remove the PMI with little effort. At that time, the homeowner can enjoy the savings from that point on.
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