Fort Collins Appraisal, Inc. can help you remove your Private Mortgage InsuranceA 20% down payment is typically accepted when purchasing a home. Because the liability for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and typical value changesin the event a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender endure the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender if a borrower doesn't pay on the loan and the value of the house is lower than the loan balance. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender takes in all the deficits, PMI is profitable for the lender because they collect the money, and they get the money if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner prevent bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Acute home owners can get off the hook ahead of time. The law promises that, upon request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. Since it can take many years to arrive at the point where the principal is only 20% of the initial amount of the loan, it's important to know how your home has increased in value. After all, all of the appreciation you've acquired over the years counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends hint at plunging home values, be aware that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have gained equity before things settled down. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It is an appraiser's job to know the market dynamics of their area. At Fort Collins Appraisal, Inc., we know when property values have risen or declined. We're experts at pinpointing value trends in Fort Collins, Larimer County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually remove the PMI with little trouble. At that time, the home owner can retain the savings from that point on.
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