Let Joseph Mier & Associates help you decide if you can cancel your PMI

A 20% down payment is usually accepted when purchasing a home. Considering the risk for the lender is usually only the difference between the home value and the sum due on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and regular value fluctuations in the event a borrower defaults.

During the recent mortgage upturn of the mid 2000s, it was common to see lenders only asking for down payments of 10, 5 or even 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan guards the lender in the event a borrower is unable to pay on the loan and the value of the property is less than what is owed on the loan.

PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible. It's favorable for the lender because they secure the money, and they get the money if the borrower defaults, different from a piggyback loan where the lender absorbs all the deficits.


	Is PMI included in your monthly house payment? Call Joseph Mier & Associates today at (985) 230-0730 or send us an e-mail. Documentation of your home's current value could save you thousands.

How can homeowners avoid bearing the cost of PMI?

The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Keen home owners can get off the hook ahead of time. The law stipulates that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent.

Considering it can take a significant number of years to get to the point where the principal is only 80% of the original amount borrowed, it's important to know how your Louisiana home has grown in value. After all, all of the appreciation you've acquired over the years counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not adhere to national trends and/or your home may have acquired equity before the economy cooled off. So even when nationwide trends forecast falling home values, you should understand that real estate is local.

The hardest thing for many consumers to figure out is whether their home equity has exceeded the 20% point. An accredited, Louisiana licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Joseph Mier & Associates, we're masters at determining value trends in Hammond, Tangipahoa 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 do away with the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.


	The amount you keep from getting rid of your PMI pays for the appraisal in no time. Joseph Mier & Associates is in the business of tracking value trends in Hammond and Tangipahoa 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