Have equity in your home? Want a lower payment? An appraisal from Rabin Appraisal Associates 847-337-5787 can help you get rid of your PMI.It's typically known that a 20% down payment is accepted when getting a mortgage. The lender's risk is oftentimes only the difference between the home value and the sum remaining on the loan, so the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and typical value variations in the event a purchaser doesn't pay. The market was accepting down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the worth of the property is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible, PMI is pricey to a borrower. It's beneficial 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 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 homeowners can keep from bearing the expense of PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute homeowners can get off the hook a little early. The law pledges that, at the request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. It can take many years to reach the point where the principal is just 20% of the original amount of the loan, so it's crucial to know how your home has increased in value. After all, any appreciation you've achieved over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood may not be following the national trends and/or your home could have acquired equity before things settled down, so even when nationwide trends predict decreasing home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help homeowners 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 know the market dynamics of their area. At Rabin Appraisal Associates 847-337-5787, we're masters at recognizing value trends in Gurnee, Lake County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will most often drop the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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