Let TSH Real Estate and Appraisal Services, LLC help you decide if you can eliminate your PMIA 20% down payment is usually the standard when purchasing a home. Because the risk for the lender is oftentimes only the difference between the home value and the amount due on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and natural value fluctuationson the chance that a borrower defaults. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender handle the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the market price of the home is lower than what is owed on the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible. Different from a piggyback loan where the lender takes in all the costs, PMI is beneficial for the lender because they acquire the money, and they receive payment 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 can a buyer avoid paying PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law guarantees that, upon request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. So, acute homeowners can get off the hook sooner than expected. Since it can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, it's crucial to know how your home has increased 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 heeding the national trends and/or your home could have gained equity before things settled down, so even when nationwide trends forecast decreasing home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. It is an appraiser's job to recognize the market dynamics of their area. At TSH Real Estate and Appraisal Services, LLC, we're experts at analyzing value trends in Kaneohe, Honolulu 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 cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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