Let Metro Valuation help you discover if you can get rid of your PMIIt's generally inferred that a 20% down payment is accepted when buying a house. The lender's risk is oftentimes only the difference between the home value and the amount outstanding on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and regular value changes 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 increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower defaults on the loan and the market price of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be costly to a borrower. Separate from a piggyback loan where the lender consumes all the damages, PMI is money-making for the lender because they acquire the money, and they get paid 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 can buyers avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, smart homeowners can get off the hook ahead of time. It can take countless years to get to the point where the principal is just 20% of the initial amount of the loan, so it's crucial to know how your home has increased in value. After all, any appreciation you've obtained over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be following the national trends and/or your home may have secured equity before things simmered down, so even when nationwide trends hint at falling home values, you should understand that real estate is local. The toughest thing for almost all home owners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Metro Valuation, we know when property values have risen or declined. We're experts at identifying value trends in Scottsdale, Maricopa County and surrounding areas. When faced with data from an appraiser, the mortgage company will often do away with the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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