Jordan Services can help you remove your Private Mortgage InsuranceIt's widely understood that a 20% down payment is accepted when getting a mortgage. Because the liability for the lender is oftentimes only the remainder between the home value and the sum outstanding on the loan, the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and regular value fluctuationson the chance that a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it became common to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender handle the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the worth of the property is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be pricey to a borrower. Contradictory to a piggyback loan where the lender consumes all the losses, PMI is money-making for the lender because they collect the money, and they get the money 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 home buyers can keep from bearing the cost of PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Keen homeowners can get off the hook a little early. The law states that, at the request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the original loan amount, so it's crucial to know how your home has grown in value. After all, all of the appreciation you've acquired over the years 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 signify plummeting home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have acquired equity before things settled down. The toughest thing for almost all 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. As appraisers, it's our job to know the market dynamics of our area. At Jordan Services, we're experts at determining value trends in Lufkin, Angelina County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will generally do away with the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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