Let Florida Property Research & Appraisal help you determine if you can eliminate your PMIA 20% down payment is typically the standard when getting a mortgage. The lender's risk is oftentimes only the difference between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and typical value changes in the event a purchaser defaults. During the recent mortgage boom of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower defaults on the loan and the market price of the home is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. Separate from a piggyback loan where the lender takes in all the deficits, PMI is profitable for the lender because they collect 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 home buyers prevent bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise home owners can get off the hook a little early. The law states that, at the request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is just 20% of the initial amount of the loan, so it's important to know how your home has appreciated in value. After all, any appreciation you've obtained over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends indicate plummeting home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home may have acquired equity before things cooled off. The difficult thing for most home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Florida Property Research & Appraisal, we're masters at determining value trends in Tallahassee, Leon County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often do away with the PMI with little effort. At that time, the homeowner can retain the savings from that point on.
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