Let Cape Appraisal Property Evaluations (CAPE) help you determine if you can eliminate your PMIA 20% down payment is usually the standard when getting a mortgage. The lender's liability is usually only the remainder between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and regular value changes on the chance that a borrower doesn't pay. During the recent mortgage upturn of the last decade, it was common to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan guards the lender if a borrower is unable to pay on the loan and the market price of the property is lower than what is owed on the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible. Different from a piggyback loan where the lender takes in all the losses, PMI is money-making for the lender because they collect the money, and they receive payment 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 home owners can refrain from bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute homeowners can get off the hook ahead of time. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. It can take many years to get to the point where the principal is only 20% of the initial loan amount, so it's necessary to know how your home has grown in value. After all, every bit of appreciation you've accomplished over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be reflecting the national trends and/or your home might have acquired equity before things settled down, so even when nationwide trends indicate plunging home values, you should understand that real estate is local. An accredited, 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 understand the market dynamics of their area. At Cape Appraisal Property Evaluations (CAPE), we're experts at identifying value trends in Mashpee, Barnstable County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will usually cancel the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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