The Brothers Company can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. Because the liability for the lender is generally only the difference between the home value and the sum remaining on the loan, the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and regular value variationson the chance that a purchaser is unable to pay. The market was working with down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender endure the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower defaults on the loan and the market price of the property is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible, PMI is pricey to a borrower. Separate from a piggyback loan where the lender takes in all the deficits, PMI is lucrative for the lender because they collect the money, and they get paid 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 buyers can prevent bearing the expense of PMIThe Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, keen home owners can get off the hook sooner than expected. It can take many years to reach the point where the principal is just 20% of the original amount of the loan, so it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things cooled off, so even when nationwide trends predict declining home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to recognize the market dynamics of their area. At The Brothers Company, we know when property values have risen or declined. We're experts at recognizing value trends in middle Tennessee markets. When faced with data from an appraiser, the mortgage company will often drop the PMI with little trouble. At which time, the homeowner can enjoy the savings from that point on.
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