Rushmore Appraisals can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is usually the standard. The lender's risk is usually only the difference between the home value and the amount remaining on the loan, so the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and typical value changes in the event a purchaser defaults. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or often 0 percent. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary plan guards the lender in the event a borrower doesn't pay on the loan and the market price of the house is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be expensive to a borrower. Contradictory to a piggyback loan where the lender takes in all the costs, PMI is beneficial 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 homeowners can prevent paying PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law designates that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, savvy home owners can get off the hook a little earlier. It can take many years to reach the point where the principal is just 20% of the initial amount of the loan, so it's crucial to know how your home has increased in value. After all, any appreciation you've acquired over the years counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends hint at declining home values, understand that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have acquired 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 tough thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Rushmore Appraisals, we know when property values have risen or declined. We're experts at pinpointing value trends in Hermosa, Pennington County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often eliminate the PMI with little anxiety. At which time, the homeowner can relish the savings from that point on.
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