Let Hicks Appraisal Services help you learn if you can cancel your PMI

When buying a house, a 20% down payment is typically the standard. The lender's liability is often only the remainder between the home value and the amount outstanding on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and natural value changes on the chance that a purchaser is unable to pay.

During the recent mortgage boom that our country recently experienced, it became widespread to see lenders reducing down payments to 10, 5 or often 0 percent. A lender is able to handle the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. This added policy takes care of the lender in the event a borrower defaults on the loan and the market price of the property is less than what is owed on the loan.

PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and many times isn't even tax deductible. It's beneficial for the lender because they collect the money, and they get paid if the borrower defaults, as opposed to a piggyback loan where the lender absorbs all the deficits.


	Does your monthly house payment include a fee PMI? Call Hicks Appraisal Services today at 7403546501 or send us an e-mail. Documentation of your home's current value could save you thousands.

How can a home buyer avoid bearing the expense of PMI?

The Homeowners Protection Act of 1998 requires the lenders on the majority of loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law promises that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, keen home owners can get off the hook a little earlier.

It can take many years to get to the point where the principal is only 80% of the initial amount borrowed, so it's necessary to know how your Ohio home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not follow national trends and/or your home may have gained equity before things simmered down. So even when nationwide trends predict falling home values, you should understand that real estate is local.

A certified, Ohio licensed real estate appraiser can help homeowners figure out if their equity has reached the 20% point, as it's a tough thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Hicks Appraisal Services, we're experts at analyzing value trends in Portsmouth, Scioto County, and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will most often remove the PMI with little effort. At that time, the homeowner can enjoy the savings from that point on.


	The savings from dropping your PMI pays for the appraisal in a matter of months. Hicks Appraisal Services has years of experience with value trends in Portsmouth and Scioto County. Contact us today.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year