Let Gunn and Associates help you discover if you can eliminate your PMIA 20% down payment is typically accepted when buying a house. The lender's liability is generally only the difference between the home value and the sum remaining on the loan, so the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuations on the chance that a borrower is unable to pay. Banks were taking down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower defaults on the loan and the market price of the property is lower than the loan balance. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the losses, PMI is beneficial for the lender because they collect the money, and they get paid if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can keep from paying PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Smart home owners can get off the hook a little earlier. The law pledges that, at the request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. Because it can take many years to get to the point where the principal is only 20% of the original amount of the loan, it's necessary to know how your home has grown in value. After all, every bit of appreciation you've achieved over time counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends indicate falling home values, realize that real estate is local. Your neighborhood might not be following the national trends and/or your home might have acquired equity before things simmered down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Gunn and Associates, we know when property values have risen or declined. We're experts at recognizing value trends in Dayton, Montgomery County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often eliminate the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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