Pastore & Associates, LLC can help you remove your Private Mortgage Insurance

It's generally understood that a 20% down payment is common when getting a mortgage. Since the risk for the lender is oftentimes only the difference between the home value and the amount outstanding on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and typical value changes in the event a borrower doesn't pay.

The market was accepting down payments as low as 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. A lender is able to manage the additional risk of the low down payment with Private Mortgage Insurance or PMI. This supplemental policy takes care of the lender if a borrower doesn't pay on the loan and the value of the property is lower than the loan balance.

Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible, PMI is pricey to a borrower. Instead of a piggyback loan where the lender absorbs all the damages, PMI is beneficial for the lender because they obtain the money, and they are covered if the borrower is unable to pay.


	Did you have less than 20% to put down on your mortgage? Call Pastore & Associates, LLC today at 804-423-6473 to see if you can save money by removing your Private Mortgage Insurance premium.

How can buyers prevent paying PMI?

As a result of The Homeowners Protection Act of 1998, lenders are required to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount on most loans. Keen homeowners can get off the hook a little earlier. The law pledges that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent.

Considering it can take a significant number of years to reach the point where the principal is only 80% of the original amount of the loan, it's crucial to know how your Virginia home has grown in value. After all, any appreciation you've acquired over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends predict declining home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home might have acquired equity before things simmered down.

An accredited, Virginia licensed real estate appraiser can help homeowners figure out if their equity has made it to the 20% point, as it's a difficult thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Pastore & Associates, LLC, we know when property values have risen or declined. We're masters at analyzing value trends in Midlothian, Chesterfield County, and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At that time, the home owner can enjoy the savings from that point on.


	The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than Pastore & Associates, LLC when it comes to appreciating values in Midlothian and Chesterfield 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