Paul Votta can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is typically the standard. The lender's liability is usually only the remainder between the home value and the sum outstanding on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and typical value variations in the event a borrower is unable to pay. The market was working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to manage the increased risk of the low down payment with Private Mortgage Insurance or PMI. This additional policy covers the lender if a borrower defaults on the loan and the market price of the house is less than what is owed on the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible. Contradictory to a piggyback loan where the lender takes in all the costs, PMI is money-making for the lender because they secure the money, and they receive payment 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 can homebuyers refrain from bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, acute home owners can get off the hook a little earlier. Considering it can take countless years to arrive at the point where the principal is only 20% of the initial loan amount, it's important to know how your home has grown 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 your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have secured equity before things simmered down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. It is an appraiser's job to understand the market dynamics of their area. At Paul Votta, we're masters at recognizing value trends in Scranton, Lackawanna County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. At which time, the homeowner can retain the savings from that point on.
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