Giles Appraisal Group, Inc can help you remove your Private Mortgage Insurance

When purchasing a home, a 20% down payment is typically the standard. Considering the risk for the lender is oftentimes only the remainder between the home value and the sum due on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value changesin the event a borrower is unable to pay.

During the recent mortgage upturn of the last decade, it was widespread to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to handle the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower defaults on the loan and the market price of the house is lower than what is owed on the loan.

Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible, PMI is costly to a borrower. It's profitable for the lender because they obtain the money, and they get paid if the borrower defaults, separate from a piggyback loan where the lender takes in all the damages.

Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.

How homebuyers can prevent paying PMI

With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise home owners can get off the hook sooner than expected. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent.

Considering it can take countless years to get to the point where the principal is just 20% of the initial amount borrowed, it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be minding the national trends and/or your home may have secured equity before things cooled off, so even when nationwide trends hint at plummeting home values, you should understand that real estate is local.

A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to know the market dynamics of their area. At Giles Appraisal Group, Inc, we're experts at analyzing value trends in Panama City, Fl, Bay County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will most often remove the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year