Have equity in your home? Want a lower payment? An appraisal from Definitive Valuations can help you get rid of your PMI.When getting a mortgage, a 20% down payment is typically the standard. Since the liability for the lender is usually only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and typical value fluctuationson the chance that a borrower defaults. Lenders were accepting down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the worth of the property is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI is pricey to a borrower. Unlike a piggyback loan where the lender absorbs all the deficits, PMI is lucrative for the lender because they acquire the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer keep from paying PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. So, acute home owners can get off the hook a little earlier. It can take countless years to get to the point where the principal is just 20% of the initial loan amount, so it's important to know how your home has increased in value. After all, any appreciation you've gained over the years counts towards dismissing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends signify plunging home values, understand that real estate is local. Your neighborhood might not be minding the national trends and/or your home might have acquired equity before things settled down. The hardest thing for almost all homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to know the market dynamics of our area. At Definitive Valuations, we know when property values have risen or declined. We're masters at recognizing value trends in Huntsville, Madison County and surrounding areas. Faced with figures from an appraiser, the mortgage company will often cancel the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
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