Jordan Services can help you remove your Private Mortgage InsuranceIt's widely understood that a 20% down payment is accepted when purchasing a home. The lender's liability is oftentimes only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and natural value fluctuations in the event a borrower is unable to pay. During the recent mortgage boom of the last decade, it became customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added policy guards the lender if a borrower doesn't pay on the loan and the value of the home is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible, PMI is pricey to a borrower. It's money-making for the lender because they collect the money, and they get paid if the borrower doesn't pay, contradictory to a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can keep from bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Savvy homeowners can get off the hook a little earlier. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. It can take countless years to arrive at the point where the principal is just 20% of the original loan amount, so it's necessary to know how your home has grown in value. After all, every bit of appreciation you've obtained over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends forecast plummeting home values, realize that real estate is local. Your neighborhood might not be minding the national trends and/or your home could have acquired equity before things simmered down. 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 hard thing to know. It's an appraiser's job to know the market dynamics of their area. At Jordan Services, we're masters at determining value trends in Lufkin, Angelina County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will often drop the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
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