Appraisal Associates & Consultants can help you remove your Private Mortgage InsuranceA 20% down payment is typically the standard when purchasing a home. The lender's risk is oftentimes only the difference between the home value and the sum due on the loan, so the 20% provides a nice cushion against the costs of foreclosure, reselling the home, and typical value variations on the chance that a borrower defaults. Banks were working with down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the worth of the property is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible, PMI can be pricey to a borrower. It's beneficial for the lender because they acquire the money, and they get paid if the borrower doesn't pay, contradictory to a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can avoid bearing the cost of PMIThe Homeowners Protection Act of 1998 makes the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, savvy home owners can get off the hook ahead of time. It can take many years to reach the point where the principal is just 20% of the original amount borrowed, so it's essential to know how your home has grown in value. After all, all of the appreciation you've achieved over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home could have secured equity before things settled down, so even when nationwide trends signify falling home values, you should understand that real estate is local. The hardest thing for most home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Appraisal Associates & Consultants, we know when property values have risen or declined. We're masters at analyzing value trends in Naples, Collier County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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