Let Zacour & Associates, Inc. help you discover if you can get rid of your PMIA 20% down payment is typically accepted when buying a house. The lender's risk is generally only the difference between the home value and the amount due on the loan, so the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and natural value changes in the event a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, 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 solution is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the market price of the house is less than what the borrower still owes on the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible. Opposite from a piggyback loan where the lender takes in all the deficits, PMI is beneficial for the lender because they acquire 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 homebuyers refrain from bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, smart home owners can get off the hook a little early. Because it can take many years to get to the point where the principal is just 20% of the initial loan amount, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've gained over time counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends predict declining home values, realize that real estate is local. Your neighborhood may not be adopting the national trends and/or your home might have secured equity before things cooled off. 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. It's an appraiser's job to know the market dynamics of their area. At Zacour & Associates, Inc., we're masters at analyzing value trends in El Paso, El Paso County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will often cancel the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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