Let All South Appraisals help you decide if you can get rid of your PMIWhen purchasing a home, a 20% down payment is typically the standard. Since the risk for the lender is generally only the difference between the home value and the sum due on the loan, the 20% provides a nice buffer against the expenses of foreclosure, reselling the home, and natural value changesin the event a borrower is unable to pay. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to handle the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI protects the lender if a borrower defaults on the loan and the value of the property is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible, PMI is costly to a borrower. Contradictory to a piggyback loan where the lender absorbs all the deficits, PMI is profitable for the lender because they obtain the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a buyer avoid paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Acute home owners can get off the hook ahead of time. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. It can take many years to get to the point where the principal is just 20% of the initial amount borrowed, so it's important to know how your home has grown in value. After all, every bit of appreciation you've achieved over time counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends forecast falling home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home may have gained equity before things simmered down. The difficult thing for most home owners to know is just when their home's equity rises above 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 All South Appraisals, we know when property values have risen or declined. We're masters at analyzing value trends in Butler, Taylor County and surrounding areas. Faced with data from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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