Di Cicco & Associates can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. The lender's liability is often only the remainder between the home value and the amount due on the loan, so the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and regular value fluctuations on the chance that a borrower defaults. Banks were accepting down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower defaults on the loan and the value of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible, PMI can be pricey to a borrower. Unlike 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 get the money 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 home owners can refrain from paying PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Keen homeowners can get off the hook a little earlier. The law states that, upon request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. Since it can take many years to arrive at the point where the principal is just 20% of the original amount borrowed, it's important to know how your home has increased in value. After all, any appreciation you've accomplished over time counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends predict plummeting home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have secured equity before things settled down. The difficult thing for many home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to keep up with the market dynamics of their area. At Di Cicco & Associates, we're masters at identifying value trends in Gulf Breeze, Santa Rosa County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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