Have equity in your home? Want a lower payment? An appraisal from Appraisal Professionals, LLC can help you get rid of your PMI.

When purchasing a home, a 20% down payment is typically the standard. Considering the liability for the lender is often only the difference between the home value and the sum remaining on the loan, the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value changes on the chance that a purchaser doesn't pay.

Lenders were working with down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary policy protects the lender if a borrower doesn't pay on the loan and the market price of the home is lower than what is owed 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. It's favorable for the lender because they collect the money, and they receive payment if the borrower defaults, in contrast to a piggyback loan where the lender consumes all the deficits.

The amount you keep from cancelling your PMI pays for the appraisal in no time. Nobody is more qualified than Appraisal Professionals, LLC when it comes to appreciating values in the city of Austin and Travis County. Contact us today.

How can a homebuyer keep from bearing the cost of PMI?

As a result of The Homeowners Protection Act of 1998, lenders are forced to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount on nearly all loans. Wise home owners can get off the hook sooner than expected. The law designates that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent.

It can take several years to arrive at the point where the principal is only 80% of the original amount of the loan, so it's essential to know how your Texas home has appreciated in value. After all, every bit of appreciation you've achieved over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends hint at lower overall home values, realize that real estate is local. Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things cooled off.

An accredited, 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. It's an appraiser's job to know the market dynamics of their area. At Appraisal Professionals, LLC, we're experts at analyzing value trends in Austin, Travis 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 remove the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.

Has your home value appreciated since you first purchased? Call Appraisal Professionals, LLC today at (512) 535-5007 to see if you can save money by removing your Private Mortgage Insurance payment.

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