Have equity in your home? Want a lower payment? An appraisal from Parkway Appraisals, Inc. can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. The lender's liability is usually only the remainder between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and regular value variations on the chance that a borrower defaults. During the recent mortgage upturn of the mid 2000s, it was customary to see lenders taking down payments of 10, 5 or sometimes 0 percent. A lender is able to endure the additional risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender if a borrower doesn't pay on the loan and the market price of the home is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be costly to a borrower. Separate from a piggyback loan where the lender consumes all the costs, PMI is lucrative for the lender because they secure the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer refrain from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law promises that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, savvy home owners can get off the hook sooner than expected. It can take many years to get to the point where the principal is only 20% of the original loan amount, so it's necessary to know how your home has increased in value. After all, every bit of appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends hint at decreasing home values, be aware that real estate is local. Your neighborhood may not be adopting the national trends and/or your home may have gained equity before things cooled off. The toughest thing for many 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 know the market dynamics of our area. At Parkway Appraisals, Inc., we're masters at determining value trends in Burnsville, Twin Cities Metro area and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will often eliminate the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
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