Arizona Valleywide Appraisals, LLC can help you remove your Private Mortgage InsuranceIt's largely inferred that a 20% down payment is 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% adds a nice cushion against the expenses of foreclosure, reselling the home, and natural value variations in the event a purchaser doesn't pay. During the recent mortgage boom of the mid 2000s, it was customary to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added plan protects the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be expensive to a borrower. It's favorable for the lender because they secure the money, and they receive payment if the borrower defaults, different from a piggyback loan where the lender absorbs 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 a buyer avoid paying PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Acute home owners can get off the hook beforehand. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. It can take many years to arrive at the point where the principal is only 20% of the original amount of the loan, so it's necessary to know how your home has increased in value. After all, all of the appreciation you've accomplished over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends forecast falling home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home could have secured equity before things calmed down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Arizona Valleywide Appraisals, LLC, we know when property values have risen or declined. We're masters at pinpointing value trends in Scottsdale, Maricopa County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
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