Have equity in your home? Want a lower payment? An appraisal from Patterson Appraisal Service can help you get rid of your PMI.

A 20% down payment is usually the standard when buying a house. The lender's only liability is usually just the difference between the home value and the balance outstanding on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and typical value changes on the chance that a borrower doesn't pay.

The market was working with down payments as low as 10, 5 and frequently 0 percent during the mortgage boom of the last decade. A lender is able to handle the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the value of the house is less than the loan balance.

PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and frequently isn't even tax deductible. It's lucrative for the lender because they secure the money, and they receive payment if the borrower doesn't pay, unlike a piggyback loan where the lender consumes all the damages.


	Is PMI a part of your monthly house payment? Call Patterson Appraisal Service today at 361-575-8888 or send us an e-mail. A recent appraisal could save you thousands.

How can a home owner prevent paying PMI?

The Homeowners Protection Act of 1998 makes the lenders on the majority of loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Wise home owners can get off the hook sooner than expected. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount equals just 80 percent.

Because it can take several years to reach the point where the principal is only 80% of the initial loan amount, it's necessary to know how your Texas home has appreciated in value. After all, every bit of appreciation you've gained over the years counts towards abolishing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends signify lower overall home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home might have gained equity before things cooled off.

The hardest thing for many people to figure out is just when their home's equity rises above the 20% point. An accredited, Texas licensed real estate appraiser can surely help. As appraisers, it's our job to know the market dynamics of our area. At Patterson Appraisal Service, we know when property values have risen or declined. We're masters at identifying value trends in Victoria, Victoria County, and surrounding areas. Faced with information from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.


	Is PMI something increasing your monthly house payment? Call Patterson Appraisal Service today at 361-575-8888 or send us an e-mail. A new appraisal could save you thousands.

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