Let Tri-County Appraisals help you discover if you can eliminate your PMIA 20% down payment is usually the standard when buying a house. The lender's liability is often only the difference between the home value and the sum due on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and typical value fluctuations in the event a purchaser is unable to pay. During the recent mortgage boom of the last decade, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender handle the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This added policy takes care of the lender if a borrower is unable to pay on the loan and the market price of the property is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and frequently isn't even tax deductible, PMI is costly to a borrower. It's beneficial for the lender because they acquire the money, and they get paid if the borrower defaults, 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 homeowners can prevent paying PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law designates that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent. So, keen homeowners can get off the hook a little earlier. It can take countless years to arrive at the point where the principal is only 20% of the initial amount of the loan, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends indicate falling home values, understand that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have acquired equity before things cooled off. The difficult thing for many homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. It is an appraiser's job to recognize the market dynamics of their area. At Tri-County Appraisals, we know when property values have risen or declined. We're masters at analyzing value trends in Loveland, Larimer County and surrounding areas. When faced with data from an appraiser, the mortgage company will most often remove the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
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