Let Appraisal Professionals, LLC help you discover if you can get rid of your PMI

It's largely known that a 20% down payment is the standard when buying a house. The lender's only exposure is typically just the remainder between the home value and the sum remaining on the loan, so the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and typical value changes in the event a purchaser doesn't pay.

Lenders were working with down payments dropping to 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the additional risk of the low down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the market price of the house is lower than what is owed on the loan.

PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible. Unlike a piggyback loan where the lender takes in all the damages, PMI is favorable for the lender because they acquire the money, and they receive payment if the borrower doesn't pay.


Has your real estate appreciated since you first purchased? Contact Appraisal Professionals, LLC today at (512) 627-4017 to see if you can get rid of your Private Mortgage Insurance payment.

How can a buyer prevent bearing the expense of PMI?

With the passage of The Homeowners Protection Act of 1998, lenders are obligated to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount on nearly all loans. The law pledges that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, wise homeowners can get off the hook a little earlier.

It can take several years to reach the point where the principal is just 80% of the initial amount of the loan, so it's necessary to know how your Texas home has appreciated in value. After all, any appreciation you've obtained over the years counts towards abolishing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends signify lower overall home values, be aware that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home may have acquired equity before things cooled off.

The difficult thing for most people to figure out is whether their home equity has exceeded the 20% point. A certified, Texas licensed real estate appraiser can definitely help. It's an appraiser's job to know the market dynamics of their area. At Appraisal Professionals, LLC, we know when property values have risen or declined. We're experts at analyzing value trends in Kyle, Hays County, and surrounding areas. When faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.


Is PMI a lineitem in your monthly house payment? Call Appraisal Professionals, LLC today at (512) 627-4017 or send us an e-mail. Documentation of your home's current value 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