Have equity in your home? Want a lower payment? An appraisal from Debbie Lindley Real Estate Appraisals can help you get rid of your PMI.A 20% down payment is typically accepted when buying a house. Considering the liability for the lender is often only the difference between the home value and the sum due on the loan, the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and regular value changesin the event a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it was customary to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible, PMI can be costly to a borrower. Separate from a piggyback loan where the lender consumes all the costs, PMI is beneficial for the lender because they collect 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 home buyers can prevent bearing the cost of PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Acute home owners can get off the hook a little earlier. The law guarantees that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. It can take many years to get to the point where the principal is only 20% of the original amount borrowed, so it's crucial to know how your home has increased in value. After all, any appreciation you've gained over time counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends predict declining home values, be aware that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things settled down. The hardest thing for almost all homeowners to understand 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 know the market dynamics of their area. At Debbie Lindley Real Estate Appraisals, we're masters at pinpointing value trends in Medford, Jackson County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often do away with the PMI with little anxiety. At which time, the home owner can enjoy the savings from that point on.
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