Appraisal First, Inc. can help you remove your Private Mortgage InsuranceWhen getting a mortgage, a 20% down payment is typically the standard. The lender's liability is oftentimes only the difference between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value fluctuations in the event a borrower doesn't pay. During the recent mortgage boom of the last decade, it became customary to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower is unable to pay on the loan and the market price of the house is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn't even tax deductible, PMI is costly to a borrower. It's advantageous for the lender because they obtain the money, and they get the money if the borrower defaults, separate from a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can prevent paying PMIWith the employment 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 equals 78 percent of the original loan amount. Smart home owners can get off the hook ahead of time. The law promises that, upon request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. Since it can take countless years to reach the point where the principal is just 20% of the initial amount of the loan, it's important to know how your home has increased in value. After all, any appreciation you've achieved over the years counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends signify decreasing home values, realize that real estate is local. Your neighborhood may not be following the national trends and/or your home might have acquired equity before things cooled off. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Appraisal First, Inc., we know when property values have risen or declined. We're masters at determining value trends in Springfield, Greene County and surrounding areas. When faced with data from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At that time, the home owner can retain the savings from that point on.
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