Let Tri-County Appraisals help you figure out if you can eliminate your PMIIt's generally inferred that a 20% down payment is common when getting a mortgage. The lender's risk is often only the remainder between the home value and the amount due on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and typical value fluctuations in the event a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it became customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. This supplemental policy protects the lender in case a borrower doesn't pay on the loan and the value of the house is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible, PMI is costly to a borrower. It's advantageous for the lender because they obtain the money, and they get paid if the borrower doesn't pay, unlike a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can avoid bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Smart homeowners can get off the hook sooner than expected. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. It can take many years to reach the point where the principal is only 20% of the original loan amount, so it's essential to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends forecast plunging home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have gained equity before things simmered down. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. As appraisers, it's our job to know the market dynamics of our area. At Tri-County Appraisals, we know when property values have risen or declined. We're experts at determining value trends in Loveland, Larimer County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually remove the PMI with little anxiety. At that time, the homeowner can enjoy the savings from that point on.
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