Have equity in your home? Want a lower payment? An appraisal from ASAP Appraisal Group can help you get rid of your PMI.It's typically understood that a 20% down payment is the standard when buying a house. The lender's risk is usually only the difference between the home value and the sum outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and natural value fluctuations in the event a borrower is unable to pay. The market was working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan covers the lender if a borrower defaults on the loan and the worth of the property is lower 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 lumped into the mortgage payment and often isn't even tax deductible. Opposite from a piggyback loan where the lender takes in all the deficits, PMI is lucrative for the lender because they acquire the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can prevent bearing the expense of PMIThe Homeowners Protection Act of 1998 makes the lenders on most loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law designates that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, smart home owners can get off the hook sooner than expected. It can take countless years to reach the point where the principal is only 20% of the initial loan amount, so it's essential to know how your home has appreciated in value. After all, any appreciation you've acquired over time counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home might have acquired equity before things calmed down, so even when nationwide trends indicate declining home values, you should realize that real estate is local. The difficult thing for most home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At ASAP Appraisal Group, we're masters at determining value trends in Lakeland, Polk County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally do away with the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.
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