Have equity in your home? Want a lower payment? An appraisal from Tri-County Appraisals can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. Considering the liability for the lender is usually only the remainder between the home value and the amount remaining on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value changeson the chance that a borrower defaults. Banks were taking down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan guards the lender if a borrower doesn't pay on the loan and the worth of the home is lower than the balance of the loan. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible. It's profitable for the lender because they secure the money, and they receive payment if the borrower is unable to pay, unlike a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, wise home owners can get off the hook a little earlier. Since it can take countless years to get to the point where the principal is just 20% of the initial loan amount, it's essential to know how your home has appreciated in value. After all, any appreciation you've acquired over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Even when nationwide trends signify plummeting home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home could have secured equity before things cooled off. The hardest thing for many homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At Tri-County Appraisals, we know when property values have risen or declined. We're experts at recognizing value trends in Loveland, Larimer County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often remove the PMI with little effort. At that time, the home owner can retain the savings from that point on.
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