TAMMY WOODMAN can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. The lender's risk is oftentimes only the remainder between the home value and the sum remaining on the loan, so the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and natural value fluctuations in the event a purchaser defaults. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplementary plan takes care of the lender if a borrower doesn't pay on the loan and the value 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 frequently isn't even tax deductible. Contradictory to a piggyback loan where the lender consumes all the losses, PMI is lucrative for the lender because they acquire the money, and they get the money 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 owners can avoid bearing the cost of PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law guarantees that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. So, wise homeowners can get off the hook a little earlier. It can take many years to reach the point where the principal is only 20% of the original amount of the loan, so it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be heeding 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. The toughest thing for most homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. It's an appraiser's job to know the market dynamics of their area. At TAMMY WOODMAN, we know when property values have risen or declined. We're masters at recognizing value trends in Corvallis, Benton County and surrounding areas. When faced with figures from an appraiser, the mortgage company will most often drop the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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