Rabin Appraisal Associates 847-337-5787 can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is usually the standard. Since the risk for the lender is often only the difference between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value variationsin the event a borrower is unable to pay. The market was accepting down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender in the event a borrower defaults on the loan and the worth of the house is less than the balance of the loan. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn't even tax deductible. It's money-making for the lender because they secure the money, and they get paid if the borrower doesn't pay, separate from a piggyback loan where the lender absorbs all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer keep from bearing the expense of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Smart homeowners can get off the hook a little earlier. The law stipulates that, at the request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. It can take many years to reach the point where the principal is just 20% of the initial loan amount, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends forecast decreasing home values, realize that real estate is local. Your neighborhood may not be following the national trends and/or your home may have gained equity before things settled down. The hardest thing for many homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to understand the market dynamics of our area. At Rabin Appraisal Associates 847-337-5787, we're masters at pinpointing value trends in Gurnee, Lake County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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