Appraisal Associates & Consultants can help you remove your Private Mortgage InsuranceIt's widely inferred that a 20% down payment is the standard when buying a house. The lender's liability is usually only the difference between the home value and the amount outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and typical value variations in the event a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it was common to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the additional risk of the small down payment with Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the worth of the home is lower than what is owed on the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible. It's beneficial for the lender because they collect the money, and they receive payment if the borrower defaults, opposite from a piggyback loan where the lender consumes all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners refrain from paying PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Smart homeowners can get off the hook a little early. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. Because it can take many years to get to the point where the principal is only 20% of the original amount borrowed, it's important to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Despite the fact that nationwide trends forecast plummeting home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home could have gained equity before things settled down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Appraisal Associates & Consultants, we know when property values have risen or declined. We're experts at pinpointing value trends in Naples, Collier County and surrounding areas. When faced with information from an appraiser, the mortgage company will often cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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