Az-Tech Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is usually the standard when buying a house. Because the liability for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and natural value variationson the chance that a purchaser defaults. The market was working with down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower is unable to pay on the loan and the worth of the property is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible, PMI is costly to a borrower. It's profitable for the lender because they collect the money, and they get the money if the borrower is unable to pay, different from a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can prevent bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cease 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 promises that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. It can take many years to reach the point where the principal is just 20% of the original amount borrowed, so it's important to know how your home has grown in value. After all, any appreciation you've achieved over the years counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Your neighborhood might not be following the national trends and/or your home may have gained equity before things simmered down, so even when nationwide trends signify falling home values, you should realize that real estate is local. The toughest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At Az-Tech Appraisals, we're masters at identifying value trends in Tucson, Pima County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will generally drop the PMI with little effort. At which time, the home owner can delight in the savings from that point on.
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