Let MVP Appraisal Group help you discover if you can cancel your PMIWhen purchasing a home, a 20% down payment is usually the standard. The lender's liability is generally only the remainder between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and natural value changes on the chance that a purchaser defaults. The market was accepting down payments down to 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender endure the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan protects the lender in the event a borrower defaults on the loan and the market price of the house is lower than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI can be costly to a borrower. It's favorable for the lender because they collect the money, and they receive payment if the borrower defaults, different from a piggyback loan where the lender takes in all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers refrain from bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, wise homeowners can get off the hook a little earlier. It can take countless years to get to the point where the principal is only 20% of the original amount of the loan, so it's crucial to know how your home has increased in value. After all, all of the appreciation you've obtained over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things calmed down, so even when nationwide trends hint at falling home values, you should realize that real estate is local. The toughest thing for many home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At MVP Appraisal Group, we're masters at analyzing value trends in Saint Charles, Saint Charles County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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