William Bradford & Associates can help you remove your Private Mortgage InsuranceIt's generally inferred that a 20% down payment is accepted when getting a mortgage. Since the risk for the lender is generally only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and typical value fluctuationsin the event a borrower is unable to pay. During the recent mortgage boom of the last decade, it was common to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to handle the added risk of the low down payment with Private Mortgage Insurance or PMI. This additional policy takes care of the lender in case a borrower defaults on the loan and the market price of the home is lower than the loan balance. PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. Contradictory to a piggyback loan where the lender consumes all the losses, PMI is advantageous 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 homeowners can refrain from bearing the cost of PMIThe Homeowners Protection Act of 1998 makes the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law pledges that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. So, keen homeowners can get off the hook ahead of time. Because it can take many years to arrive at the point where the principal is just 20% of the original loan amount, it's necessary to know how your home has increased in value. After all, every bit of appreciation you've gained over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood may not be heeding the national trends and/or your home may have acquired equity before things cooled off, so even when nationwide trends signify declining home values, you should understand that real estate is local. An accredited, 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 William Bradford & Associates, we're masters at analyzing value trends in Baton Rouge, East Baton Rouge County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will most often do away with the PMI with little trouble. At which time, the home owner can retain the savings from that point on.
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