Prudhomme Real Estate & Appraisal Group can help you remove your Private Mortgage InsuranceWhen getting a mortgage, a 20% down payment is typically the standard. The lender's liability is oftentimes only the difference between the home value and the amount due on the loan, so the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and natural value variations in the event a purchaser defaults. Banks were accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower defaults on the loan and the worth of the house is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible, PMI can be pricey to a borrower. It's lucrative for the lender because they collect the money, and they get the money if the borrower is unable to pay, unlike a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can refrain from paying PMIThe Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Wise homeowners can get off the hook ahead of time. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. It can take many years to arrive at the point where the principal is just 20% of the original amount of the loan, so it's essential to know how your home has grown in value. After all, every bit of appreciation you've gained over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends predict plummeting home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have acquired equity before things settled down. The hardest thing for many home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. It is an appraiser's job to know the market dynamics of their area. At Prudhomme Real Estate & Appraisal Group, we know when property values have risen or declined. We're experts at analyzing value trends in New Orleans, Orleans County and surrounding areas. Faced with information from an appraiser, the mortgage company will often do away with the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
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