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

A 20% down payment is usually accepted when purchasing a home. Since the risk for the lender is usually only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and regular value changes in the event a borrower doesn't pay.

Lenders were accepting down payments as low as 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. How does a lender endure the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower defaults on the loan and the market price of the home is less than what the borrower still owes on the loan.

PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible. It's money-making for the lender because they acquire the money, and they get the money if the borrower defaults, as opposed to a piggyback loan where the lender consumes all the deficits.


The amount you keep from cancelling the PMI required when you got your mortgage 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 homeowner 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 equals 78 percent of the initial loan amount. The law designates that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent. So, keen home owners can get off the hook a little earlier.

It can take a significant number of years to reach the point where the principal is only 80% of the initial amount of the loan, so it's essential to know how your Texas home has grown in value. After all, all of the appreciation you've accomplished over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not conform to national trends and/or your home could have secured equity before the economy declined. So even when nationwide trends predict a reduction in home values, you should realize that real estate is local.

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 tough thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Appraisal Professionals, LLC, we're masters at identifying value trends in Austin, Travis 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 often eliminate the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.


The savings from cancelling the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Appraisal Professionals, LLC when it comes to appreciating values in Austin and Travis 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