Let Rabin Appraisal Associates 847-337-5787 help you decide if you can get rid of your PMIIt's widely known that a 20% down payment is common when buying a house. The lender's liability is usually only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and regular value fluctuations in the event a borrower defaults. Banks were working with down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI covers the lender if a borrower is unable to pay on the loan and the market price of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI can be pricey to a borrower. It's lucrative for the lender because they acquire the money, and they receive payment if the borrower doesn't pay, different from a piggyback loan where the lender takes in all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can keep from bearing the expense of PMIThe Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law states that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, keen homeowners can get off the hook a little early. Considering it can take many years to get to the point where the principal is just 20% of the original loan amount, it's essential to know how your home has increased in value. After all, all of the appreciation you've accomplished over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends predict plunging home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home might have secured equity before things settled down. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. As appraisers, it's our job to know the market dynamics of our area. At Rabin Appraisal Associates 847-337-5787, we know when property values have risen or declined. We're experts at determining value trends in Gurnee, Lake County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often do away with the PMI with little anxiety. At which time, the homeowner can enjoy the savings from that point on.
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