Bradley & Associates can help you remove your Private Mortgage InsuranceA 20% down payment is typically the standard when buying a house. The lender's liability is generally only the difference between the home value and the amount outstanding on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and regular value fluctuations in the event a purchaser defaults. During the recent mortgage upturn of the last decade, it became customary to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender manage the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This additional policy takes care of the lender in the event a borrower doesn't pay on the loan and the worth of the house is less than the balance of the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and generally isn't even tax deductible. Unlike a piggyback loan where the lender absorbs all the deficits, PMI is beneficial for the lender because they acquire the money, and they get paid 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 homeowner avoid paying PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute home owners can get off the hook sooner than expected. The law designates that, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the original amount of the loan, so it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home might have gained equity before things settled down, so even when nationwide trends signify declining home values, you should understand that real estate is local. The difficult 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. It's an appraiser's job to understand the market dynamics of their area. At Bradley & Associates, we're experts at analyzing value trends in Franklin, Williamson County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
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