Bailey Real Estate Advisors, LLC can help you remove your Private Mortgage InsuranceIt's largely understood that a 20% down payment is the standard when purchasing a home. Considering the risk for the lender is usually only the remainder between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the costs of foreclosure, reselling the home, and regular value variationson the chance that a borrower is unable to pay. Banks were working with down payments as low as 10, 5 and even 0 percent during the mortgage boom of the last decade. A lender is able to handle the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplementary policy covers the lender if a borrower doesn't pay on the loan and the worth of the home is less than the loan balance. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and generally isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the damages, PMI is lucrative for the lender because they collect the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can prevent bearing the expense of PMIWith the employment of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law designates that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, savvy home owners can get off the hook a little early. It can take many years to get to the point where the principal is only 20% of the initial amount of the loan, so it's essential to know how your home has increased in value. After all, every bit of appreciation you've gained over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood may not be heeding the national trends and/or your home might have acquired equity before things simmered down, so even when nationwide trends signify declining home values, you should understand that real estate is local. The toughest thing for almost all homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to understand the market dynamics of their area. At Bailey Real Estate Advisors, LLC, we're masters at identifying value trends in Shelby, Cleveland County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally drop the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
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