Have equity in your home? Want a lower payment? An appraisal from Accurate Value Real Estate Appraisals can help you get rid of your PMI.It's largely understood that a 20% down payment is the standard when purchasing a home. The lender's risk is often only the remainder between the home value and the sum outstanding on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and typical value variations in the event a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the additional risk of the small down payment with Private Mortgage Insurance or PMI. This supplemental policy guards the lender if a borrower doesn't pay on the loan and the value of the home is lower than what is owed on the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible. It's money-making for the lender because they obtain the money, and they receive payment if the borrower doesn't pay, opposite from 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 can homebuyers prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute homeowners can get off the hook sooner than expected. The law stipulates that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. Because it can take many years to get to the point where the principal is only 20% of the initial loan amount, it's necessary to know how your home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends indicate falling home values, realize that real estate is local. Your neighborhood may not be heeding the national trends and/or your home may have acquired equity before things cooled off. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Accurate Value Real Estate Appraisals, we know when property values have risen or declined. We're masters at determining value trends in South Lyon, Oakland County and surrounding areas. When faced with figures from an appraiser, the mortgage company will most often drop the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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