Helm & Assoc Inc can help you remove your Private Mortgage InsuranceIt's typically known that a 20% down payment is the standard when getting a mortgage. The lender's risk is often only the remainder between the home value and the sum remaining on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, reselling the home, and typical value changes in the event a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it was widespread to see lenders taking down payments of 10, 5 or sometimes 0 percent. A lender is able to endure the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender if a borrower defaults on the loan and the value of the home is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible, PMI is costly to a borrower. It's beneficial for the lender because they obtain the money, and they receive payment if the borrower doesn't pay, different from a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer refrain from bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Wise home owners can get off the hook beforehand. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. Because it can take many years to arrive at the point where the principal is just 20% of the initial amount of the loan, it's important to know how your home has grown in value. After all, every bit of appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends predict declining home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have gained equity before things cooled off. The hardest thing for almost all home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to recognize the market dynamics of our area. At Helm & Assoc Inc, we're experts at determining value trends in Salem, Roanoke County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will often eliminate the PMI with little effort. At which time, the home owner can relish the savings from that point on.
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