Let Mountain Home Properties help you determine if you can get rid of your PMIA 20% down payment is usually the standard when getting a mortgage. Because the liability for the lender is usually only the difference between the home value and the sum outstanding on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and typical value fluctuationsin the event a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender manage the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the worth of the property is lower than the balance of the loan. PMI is pricey 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 favorable for the lender because they acquire 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 homeowners avoid bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law guarantees that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, savvy homeowners can get off the hook a little earlier. Since it can take countless years to reach the point where the principal is just 20% of the initial loan amount, it's essential to know how your home has appreciated in value. After all, all of the appreciation you've acquired over the years 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 heeding the national trends and/or your home might have secured equity before things settled down, so even when nationwide trends hint at plunging home values, you should realize that real estate is local. The difficult 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 surely help. As appraisers, it's our job to recognize the market dynamics of our area. At Mountain Home Properties, we're experts at recognizing value trends in Colorado Springs, El Paso County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will most often do away with the PMI with little effort. At that time, the home owner can delight in the savings from that point on.
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