Premier Appraisals, Inc. can help you remove your Private Mortgage InsuranceIt's generally understood that a 20% down payment is the standard when purchasing a home. The lender's liability is generally only the difference between the home value and the amount remaining on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and natural value changes in the event a purchaser doesn't pay. Lenders were taking down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower doesn't pay on the loan and the worth of the house is less than what is owed on the loan. PMI is costly to a borrower in that 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 absorbs all the losses, PMI is money-making for the lender because they acquire the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, smart home owners can get off the hook sooner than expected. Because it can take many years to get to the point where the principal is just 20% of the initial amount of the loan, it's essential to know how your home has appreciated in value. After all, all of the appreciation you've obtained over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends indicate plummeting home values, understand that real estate is local. Your neighborhood might not be following the national trends and/or your home may have secured equity before things cooled off. The toughest thing for many homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to know the market dynamics of our area. At Premier Appraisals, Inc., we know when property values have risen or declined. We're masters at analyzing value trends in Nesconset, Suffolk County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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