Let Pollock Appraisal Group, LLC help you decide if you can cancel your PMIWhen getting a mortgage, a 20% down payment is usually the standard. The lender's liability is generally only the difference between the home value and the amount due on the loan, so the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and regular value fluctuations in the event a borrower doesn't pay. During the recent mortgage upturn of the last decade, it became common to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to endure the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This added policy protects the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible, PMI can be expensive to a borrower. It's favorable for the lender because they secure the money, and they get paid if the borrower doesn't pay, different from a piggyback loan where the lender consumes 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 buyers refrain from paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law guarantees that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, wise homeowners can get off the hook ahead of time. It can take many years to arrive at the point where the principal is just 20% of the initial loan amount, so it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've obtained over time counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends indicate declining home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home may have gained equity before things cooled off. The toughest thing for almost all home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At Pollock Appraisal Group, LLC, we're experts at analyzing value trends in New Orleans, Orleans County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will generally do away with the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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