Denby Real Estate Inc. can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. The lender's risk is oftentimes only the remainder between the home value and the amount due on the loan, so the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and natural value fluctuations in the event a purchaser doesn't pay. During the recent mortgage boom of the last decade, it was customary to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender manage the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplementary policy guards the lender if a borrower is unable to pay on the loan and the market price of the house is less than what is owed on the loan. Since 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 obtain the money, and they get the money if the borrower defaults, contradictory to 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 buyers refrain from bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Wise home owners can get off the hook beforehand. The law pledges that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. Because it can take many years to reach the point where the principal is only 20% of the initial loan amount, it's crucial to know how your home has increased in value. After all, every bit of appreciation you've achieved over the years counts towards dismissing PMI. So what's the reason for paying 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 might have gained equity before things calmed down, so even when nationwide trends signify plunging home values, you should realize that real estate is local. The difficult thing for most home owners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Denby Real Estate Inc., we know when property values have risen or declined. We're masters at analyzing value trends in Nantucket, Nantucket County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually remove the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
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