Let HomePointe Appraisals, LLC help you determine if you can eliminate your PMIWhen getting a mortgage, a 20% down payment is typically the standard. The lender's liability is oftentimes only the remainder between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and regular value fluctuations in the event a purchaser defaults. The market was accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy guards the lender if a borrower doesn't pay on the loan and the market price of the home is less than the loan balance. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible. It's profitable for the lender because they secure the money, and they receive payment if the borrower is unable to pay, separate from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner keep from paying PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law guarantees that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, keen homeowners can get off the hook a little earlier. It can take many years to get to the point where the principal is just 20% of the original amount borrowed, so it's important to know how your home has appreciated in value. After all, all of the appreciation you've obtained over the years counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends predict declining home values, realize that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have secured equity before things calmed down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. As appraisers, it's our job to understand the market dynamics of our area. At HomePointe Appraisals, LLC, we know when property values have risen or declined. We're masters at recognizing value trends in Byron Center, Kent County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally do away with the PMI with little effort. At that time, the home owner can relish the savings from that point on.
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