Let Apple Valley Appraisal help you learn if you can eliminate your PMIA 20% down payment is usually accepted when buying a house. The lender's liability is usually only the remainder between the home value and the sum due on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, selling the home again, and natural value variations on the chance that a purchaser doesn't pay. During the recent mortgage boom of the last decade, it was common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender manage the increased risk of the small down payment? The answer 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 what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be costly to a borrower. Unlike a piggyback loan where the lender absorbs all the losses, PMI is advantageous for the lender because they secure 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 a home buyer prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law designates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, smart homeowners can get off the hook a little early. Because it can take countless years to get to the point where the principal is only 20% of the initial amount of the loan, it's essential to know how your home has grown in value. After all, all of the appreciation you've obtained over time counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood may not be following the national trends and/or your home might have gained equity before things calmed down. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Apple Valley Appraisal, we know when property values have risen or declined. We're masters at determining value trends in York, York County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually do away with the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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