Let Residential Appraisal Services help you figure out if you can cancel your PMIIt's largely known that a 20% down payment is the standard when buying a house. The lender's risk is generally only the difference between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and regular value changes on the chance that a borrower is unable to pay. During the recent mortgage boom of the last decade, it became widespread to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender in the event a borrower defaults on the loan and the value of the home is lower than what the borrower still owes on the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and generally isn't even tax deductible. It's profitable for the lender because they obtain the money, and they get paid if the borrower defaults, opposite from a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home owners can prevent bearing the cost of PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Smart homeowners 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 reaches just 80 percent. It can take countless years to arrive at the point where the principal is just 20% of the original amount of the loan, so it's necessary to know how your home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things simmered down, so even when nationwide trends signify decreasing home values, you should understand that real estate is local. An accredited, 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 is an appraiser's job to keep up with the market dynamics of their area. At Residential Appraisal Services, we're masters at analyzing value trends in Saginaw, Saginaw 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 retain the savings from that point on.
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