A Quality Appraisal can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. The lender's risk is oftentimes only the remainder between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and typical value variations in the event a purchaser defaults. The market was accepting down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender endure the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender if a borrower defaults on the loan and the market price of the home is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI can be costly to a borrower. It's advantageous for the lender because they secure the money, and they get the money if the borrower is unable to pay, opposite from a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner prevent bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Wise home owners can get off the hook a little early. The law stipulates that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. Because it can take many years to reach the point where the principal is only 20% of the initial amount borrowed, it's important to know how your home has increased in value. After all, all of the appreciation you've accomplished over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood might not be minding the national trends and/or your home may have gained equity before things cooled off. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At A Quality Appraisal, LLC, we're experts at analyzing value trends throughout Northern Colorado, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often do away with the PMI with little effort. At which time, the homeowner can retain the savings from that point on.
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