Norman Appraisal Services can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. The lender's liability is often only the remainder between the home value and the amount outstanding on the loan, so the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and regular value changes in the event a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it was customary to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender endure the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower is unable to pay on the loan and the market price of the property is lower than the balance of the loan. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. Different from a piggyback loan where the lender takes in all the costs, PMI is advantageous for the lender because they acquire the money, and they get the money 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 homeowners can avoid bearing the cost of PMIThe Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Savvy homeowners can get off the hook a little earlier. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. It can take many years to arrive at the point where the principal is just 20% of the initial amount of the loan, so it's important to know how your home has grown in value. After all, every bit of appreciation you've accomplished over time counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be following the national trends and/or your home might have acquired equity before things cooled off, so even when nationwide trends indicate declining home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Norman Appraisal Services, we know when property values have risen or declined. We're masters at determining value trends in Bradenton, Manatee County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually drop the PMI with little effort. At which time, the home owner can relish the savings from that point on.
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