Medina Appraisal Company can help you remove your Private Mortgage Insurance

It's typically inferred that a 20% down payment is the standard when purchasing a home. The lender's liability is often only the difference between the home value and the amount outstanding on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and typical value variations on the chance that a purchaser defaults.

Lenders were working with down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. A lender is able to endure the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower doesn't pay on the loan and the market price of the property is less than what the borrower still owes on the loan.

PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible. It's money-making for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, contradictory to a piggyback loan where the lender takes in all the costs.

Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.

How buyers can keep from bearing the cost of PMI

The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount equals only 80 percent. So, savvy homeowners can get off the hook ahead of time.

Because it can take countless years to arrive at the point where the principal is just 20% of the initial amount of the loan, it's crucial to know how your home has grown in value. After all, every bit of appreciation you've acquired over time counts towards abolishing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things cooled off, so even when nationwide trends signify decreasing home values, you should realize that real estate is local.

The hardest thing for most homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Medina Appraisal Company, we know when property values have risen or declined. We're masters at determining value trends in Brunswick, Medina County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year