Tri-County Appraisals can help you remove your Private Mortgage InsuranceIt's generally inferred that a 20% down payment is accepted when getting a mortgage. The lender's liability is generally only the remainder between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and regular value variations in the event a borrower is unable to pay. The market was taking down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added policy covers the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than the loan balance. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. It's lucrative for the lender because they secure the money, and they receive payment if the borrower doesn't pay, contradictory to a piggyback loan where the lender consumes all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners avoid bearing the cost of PMI?With the implementation 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 reaches 78 percent of the primary loan amount. Savvy home owners can get off the hook beforehand. The law stipulates that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. Since it can take many years to get to the point where the principal is only 20% of the original amount of the loan, it's crucial to know how your home has increased in value. After all, all of the appreciation you've gained over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Even when nationwide trends forecast plummeting home values, understand that real estate is local. Your neighborhood might not be minding the national trends and/or your home might have secured equity before things cooled off. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Tri-County Appraisals, we're masters at analyzing value trends in Loveland, Larimer 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 usually cancel the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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