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

It's generally understood that a 20% down payment is accepted when buying a house. The lender's only exposure is often just the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and natural value changes on the chance that a purchaser is unable to pay.

The market was taking down payments discounted to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the added risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender if a borrower is unable to pay on the loan and the value of the property is less than the loan balance.

Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI is costly to a borrower. As opposed to a piggyback loan where the lender consumes all the deficits, PMI is profitable for the lender because they collect the money, and they receive payment if the borrower is unable to pay.


Did you have less than 20% to put down on your mortgage? Contact Appraisal Professionals, LLC today at (512) 627-4017 to see if you can cancel your Private Mortgage Insurance premium.

How home owners can avoid bearing the expense of PMI

With the implementation of The Homeowners Protection Act of 1998, lenders are required to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount on nearly all loans. The law pledges that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, smart homeowners can get off the hook ahead of time.

It can take several years to get to the point where the principal is just 80% of the initial loan amount, so it's important to know how your Texas home has appreciated in value. After all, any appreciation you've obtained over time counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends hint at falling home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home might have secured equity before things cooled off.

A certified, Texas licensed real estate appraiser can help homeowners figure out if their equity has exceeed 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 know when property values have risen or declined. We're masters at analyzing value trends in Kyle, Hays County, and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often drop the PMI with little trouble. At that time, the home owner can retain the savings from that point on.


Does your monthly house payment have a lineitem for PMI? Call Appraisal Professionals, LLC today at (512) 627-4017 or send us an e-mail. A new 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