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 typically accepted when purchasing a home. The lender's only exposure is often just the remainder between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and natural value changes in the event a purchaser defaults.

Banks were accepting 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 endure the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. This added policy guards the lender if a borrower is unable to pay on the loan and the market price of the property is lower than what the borrower still owes on the loan.

PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible. Instead of a piggyback loan where the lender consumes all the deficits, PMI is money-making for the lender because they collect the money, and they get paid if the borrower is unable to pay.


Is PMI a part of your monthly house payment? Call Appraisal Professionals, LLC today at (512) 627-4017 or send us an e-mail. A current appraisal could save you thousands.

How can a home buyer prevent bearing the expense of PMI?

As a result of The Homeowners Protection Act of 1998, lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount on most loans. Wise homeowners can get off the hook a little early. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent.

Because it can take several years to arrive at the point where the principal is only 80% of the original amount borrowed, it's crucial to know how your Texas home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not adhere to national trends and/or your home might have gained equity before things declined. So even when nationwide trends signify declining home values, you should understand that real estate is local.

The toughest thing for almost all consumers to figure out is just when their home's equity goes over the 20% point. A certified, Texas licensed real estate appraiser can definitely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Appraisal Professionals, LLC, we know when property values have risen or declined. We're masters at recognizing value trends in Kyle, Hays County, and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often remove the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.


Does your monthly mortgage payment have a lineitem for PMI? Call Appraisal Professionals, LLC today at (512) 627-4017 or send us an e-mail. A current appraisal could save you thousands.

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