Let Accredited Appraisal Services / Home Values Tulsa help you decide if you can cancel your PMI

A 20% down payment is typically the standard when buying a house. Since the liability for the lender is often only the difference between the home value and the amount outstanding on the loan, the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and typical value variations on the chance that a borrower doesn't pay.

During the recent mortgage boom of the mid 2000s, it became widespread to see lenders only asking for down payments of 10, 5, 3 or sometimes 0 percent. How does a lender handle the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower defaults on the loan and the value of the home is less than what the borrower still owes on the loan.

PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. As opposed to a piggyback loan where the lender absorbs all the losses, PMI is money-making for the lender because they acquire the money, and they receive payment if the borrower defaults.


	Has your home value appreciated since you first purchased? Call Accredited Appraisal Services / Home Values Tulsa today at (918) 447-8003 to see if you can save money by removing your Private Mortgage Insurance payment.

How can home owners avoid paying PMI?

As a result of The Homeowners Protection Act of 1998, lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount on most loans. The law promises that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, acute home owners can get off the hook a little early.

It can take several years to reach the point where the principal is just 80% of the initial amount of the loan, so it's necessary to know how your Oklahoma home has grown in value. After all, any appreciation you've obtained over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends signify declining home values, understand that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home might have gained equity before things declined.

An accredited, Oklahoma licensed real estate appraiser can help home owners figure out just when their home's equity goes over the 20% point, as it's a difficult thing to know. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Accredited Appraisal Services / Home Values Tulsa, we're experts at recognizing value trends in Tulsa, Tulsa 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 drop the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.


	Has your home value appreciated since you first purchased? Contact Accredited Appraisal Services / Home Values Tulsa today at (918) 447-8003 to see if you can cancel your Private Mortgage Insurance premium.

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