Appraisal Alliance, LLC can help you remove your Private Mortgage InsuranceIt's widely understood that a 20% down payment is the standard when getting a mortgage. The lender's liability is usually only the remainder between the home value and the amount remaining on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and typical value variations in the event a borrower defaults. During the recent mortgage upturn of the last decade, it became widespread to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender endure the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This additional policy protects the lender in the event a borrower defaults on the loan and the value of the house is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be pricey to a borrower. It's advantageous for the lender because they acquire the money, and they receive payment if the borrower doesn't pay, unlike a piggyback loan where the lender takes in all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a buyer avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Keen home owners can get off the hook sooner than expected. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. Since it can take countless years to reach the point where the principal is only 20% of the initial amount of the loan, it's necessary to know how your home has increased in value. After all, every bit of appreciation you've acquired over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends signify plummeting home values, understand that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home could have acquired equity before things simmered down. 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. It's an appraiser's job to understand the market dynamics of their area. At Appraisal Alliance, LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Waterford, Oakland County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often cancel the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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