Powers Real Estate Services, LLC can help you remove your Private Mortgage Insurance

A 20% down payment is usually the standard when purchasing a home. The lender's liability is usually only the difference between the home value and the balance due on the loan, so the 20% adds a nice buffer against the charges of foreclosure, selling the home again, and natural value changes in the event a borrower is unable to pay.

During the recent mortgage boom of the last decade, it was customary to see lenders reducing down payments to 10, 5, 3 or even 0 percent. How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower is unable to pay on the loan and the market price of the home is less than the balance of the loan.

Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and on many occasions isn't even tax deductible, PMI is costly to a borrower. It's advantageous for the lender because they acquire the money, and they get the money if the borrower doesn't pay, as opposed to a piggyback loan where the lender absorbs all the deficits.


	Did you have less than 20% to put down on your mortgage? Call Powers Real Estate Services, LLC today at 402-651-2020 to see if you can save money by removing your Private Mortgage Insurance premium.

How can buyers refrain from bearing the expense of 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 primary loan amount on nearly all loans. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, savvy homeowners can get off the hook a little earlier.

Considering it can take a significant number of years to reach the point where the principal is just 80% of the initial loan amount, it's essential to know how your Nebraska home has grown in value. After all, all of the appreciation you've achieved over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends hint at decreasing home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home may have gained equity before things cooled off.

A certified, Nebraska licensed real estate appraiser can help home owners 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 keep up with the market dynamics of our area. At Powers Real Estate Services, LLC, we're masters at recognizing value trends in Omaha, Douglas 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 remove the PMI with little effort. At that time, the home owner can delight in 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 price of the appraisal in a matter of months. Nobody is more qualified than Powers Real Estate Services, LLC when it comes to appreciating values in Omaha and Douglas 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