Ken Colley & Associates Inc. can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when getting a mortgage. The lender's liability is often only the remainder between the home value and the sum remaining on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and regular value fluctuations in the event a purchaser doesn't pay. Banks were taking down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender handle the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender if a borrower defaults on the loan and the market price of the house is less than the loan balance. PMI can be pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender absorbs all the damages, PMI is profitable for the lender because they obtain the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Wise home owners can get off the hook sooner than expected. The law stipulates that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. Because it can take many years to get to the point where the principal is just 20% of the original amount borrowed, it's essential to know how your home has increased in value. After all, any appreciation you've gained over the years counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends indicate decreasing home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Ken Colley & Associates Inc., we know when property values have risen or declined. We're experts at pinpointing value trends in Fort Smith, Sebastian County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often cancel the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
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