Accurate Value Real Estate Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when buying a house. The lender's risk is often only the remainder between the home value and the amount due on the loan, so the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and natural value changes in the event a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower defaults on the loan and the worth of the house is less than the loan balance. PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible. Separate from a piggyback loan where the lender takes in all the damages, PMI is beneficial for the lender because they collect the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law stipulates that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. So, wise homeowners can get off the hook ahead of time. Considering it can take countless years to arrive at the point where the principal is just 20% of the original amount borrowed, it's important to know how your home has grown in value. After all, any appreciation you've obtained over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends indicate plummeting home values, be aware that real estate is local. Your neighborhood might not be following the national trends and/or your home might have gained equity before things simmered down. The hardest thing for many homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. It is an appraiser's job to understand the market dynamics of their area. At Accurate Value Real Estate Appraisals, we're masters at analyzing value trends in South Lyon, Oakland County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will often cancel the PMI with little effort. At that time, the home owner can relish the savings from that point on.
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