Let Appraisal First, Inc. help you determine if you can eliminate your PMIWhen purchasing a home, a 20% down payment is typically the standard. Because the liability for the lender is often only the difference between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the charges of foreclosure, reselling the home, and natural value fluctuationson the chance that a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it became common to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender endure the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower defaults on the loan and the market price of the house is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be costly to a borrower. Separate from a piggyback loan where the lender absorbs all the damages, PMI is favorable for the lender because they obtain the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Smart homeowners can get off the hook a little early. The law designates that, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, so 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 the balance of your loan has fallen below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home may have acquired equity before things calmed down, so even when nationwide trends indicate plummeting home values, you should realize that real estate is local. The difficult thing for most homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to keep up with the market dynamics of their area. At Appraisal First, Inc., we know when property values have risen or declined. We're masters at pinpointing value trends in Springfield, Greene County and surrounding areas. When faced with figures from an appraiser, the mortgage company will most often do away with the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
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