Let Appraisal Professionals, LLC help you figure out if you can eliminate your PMI

When buying a house, a 20% down payment is usually the standard. The lender's liability is oftentimes only the difference between the home value and the balance outstanding on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and natural value fluctuations on the chance that a purchaser defaults.

Banks were taking down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower is unable to pay on the loan and the value of the home is lower than what the borrower still owes on the loan.

Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible, PMI is costly to a borrower. Different from a piggyback loan where the lender consumes all the losses, PMI is beneficial for the lender because they secure the money, and they receive payment if the borrower defaults.


The savings from dropping your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Appraisal Professionals, LLC when it comes to appreciating values in the city of Kyle and Hays County. Contact us today.

How can a buyer prevent bearing the cost of PMI?

The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Acute homeowners can get off the hook a little earlier. The law guarantees that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent.

Because it can take several years to get to the point where the principal is only 80% of the initial loan amount, it's crucial to know how your Texas home has grown in value. After all, any appreciation you've accomplished over time counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends signify falling home values, be aware that real estate is local. Your neighborhood might not be following the national trends and/or your home might have gained equity before things cooled off.

A certified, Texas licensed real estate appraiser can help home owners figure out if their equity has made it to the 20% point, as it's a hard thing to know. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Appraisal Professionals, LLC, we're experts at recognizing value trends in Kyle, Hays County, and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.


The savings from getting rid of your PMI will make up for the cost of the appraisal in a matter of months. Appraisal Professionals, LLC stays current with value trends in Kyle and Hays County. Contact us today.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year