Let Networx Appraisal help you determine if you can get rid of your PMIIt's widely known that a 20% down payment is accepted when buying a house. The lender's risk is usually only the difference between the home value and the amount outstanding on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and natural value variations on the chance that a borrower is unable to pay. During the recent mortgage boom of the mid 2000s, it was common to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender manage the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplementary plan takes care of the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than the balance of the loan. PMI is costly to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and oftentimes isn't even tax deductible. Opposite from a piggyback loan where the lender takes in all the costs, PMI is lucrative for the lender because they collect the money, and they get paid 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 homeowners can avoid bearing the expense of PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Keen home owners can get off the hook a little early. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is just 20% of the initial amount of the loan, so it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over time counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends hint at declining home values, understand that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have gained equity before things simmered down. The toughest thing for most home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. It is an appraiser's job to recognize the market dynamics of their area. At Networx Appraisal, we're experts at pinpointing value trends in Battle Ground, Clark County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At that time, the homeowner can retain the savings from that point on.
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