The Residential Appraiser can help you remove your Private Mortgage InsuranceA 20% down payment is typically accepted when getting a mortgage. Because the risk for the lender is generally only the difference between the home value and the sum outstanding on the loan, the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and natural value variationsin the event a purchaser defaults. During the recent mortgage boom of the mid 2000s, it was customary to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender if a borrower doesn't pay on the loan and the market price of the property is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI can be expensive to a borrower. Opposite from a piggyback loan where the lender absorbs all the costs, PMI is money-making for the lender because they collect the money, and they get paid if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can keep from paying PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute homeowners can get off the hook beforehand. The law states that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. Considering it can take countless years to get to the point where the principal is only 20% of the original loan amount, it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things calmed down, so even when nationwide trends predict declining home values, you should understand that real estate is local. The hardest thing for many homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. It is an appraiser's job to recognize the market dynamics of their area. At The Residential Appraiser, we know when property values have risen or declined. We're experts at pinpointing value trends in Commerce City, Adams County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often cancel the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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