Advanced Appraisal can help you remove your Private Mortgage InsuranceIt's typically inferred that a 20% down payment is common when purchasing a home. Considering the liability for the lender is oftentimes only the difference between the home value and the sum due on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and natural value variationsin the event a purchaser defaults. During the recent mortgage boom of the last decade, it became customary to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added plan protects the lender in the event a borrower doesn't pay on the loan and the value of the property is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. Contradictory to a piggyback loan where the lender takes in all the deficits, PMI is beneficial for the lender because they obtain the money, and they receive payment 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 can buyers refrain from paying PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Keen homeowners can get off the hook ahead of time. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. Since it can take many years to reach the point where the principal is just 20% of the original amount borrowed, it's essential to know how your home has increased in value. After all, every bit of appreciation you've achieved over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood may not be following the national trends and/or your home might have secured equity before things settled down, so even when nationwide trends predict plummeting home values, you should realize that real estate is local. The toughest thing for many homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to keep up with the market dynamics of their area. At Advanced Appraisal, we know when property values have risen or declined. We're masters at recognizing value trends in Traverse City, Grand Traverse County and surrounding areas. When faced with data from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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