Gold Medal Appraisals can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is typically the standard. The lender's risk is generally only the difference between the home value and the amount remaining on the loan, so the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and natural value variations on the chance that a borrower is unable to pay. The market was working with down payments as low as 10, 5 and even 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. This additional policy guards the lender in the event a borrower defaults on the loan and the market price of the property 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 pricey to a borrower. It's favorable for the lender because they acquire the money, and they get paid if the borrower is unable to pay, opposite from a piggyback loan where the lender absorbs all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can keep from bearing the expense of PMIWith the utilization of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Savvy homeowners can get off the hook ahead of time. The law promises that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. Considering it can take many years to arrive at the point where the principal is just 20% of the initial amount borrowed, it's essential to know how your home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards removing PMI. So why should you 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 might have gained equity before things settled down, so even when nationwide trends hint at declining home values, you should realize that real estate is local. 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 keep up with the market dynamics of their area. At Gold Medal Appraisals , we're experts at determining 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 that time, the home owner can retain the savings from that point on.
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