Let Gregory Lemone Appraisal Associates help you figure out if you can get rid of your PMIWhen purchasing a home, a 20% down payment is usually the standard. The lender's risk is usually only the remainder between the home value and the sum outstanding on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, reselling the home, and typical value changes in the event a purchaser doesn't pay. During the recent mortgage boom of the last decade, it was widespread to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower doesn't pay on the loan and the market price of the home is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI is pricey to a borrower. It's lucrative for the lender because they acquire the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can prevent paying PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute homeowners can get off the hook beforehand. The law states that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. Because it can take many years to reach the point where the principal is just 20% of the initial amount borrowed, it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over the years counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be adhering to the national trends and/or your home could have gained equity before things settled down, so even when nationwide trends forecast declining home values, you should realize that real estate is local. The toughest thing for almost all homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to understand the market dynamics of our area. At Gregory Lemone Appraisal Associates, we know when property values have risen or declined. We're experts at recognizing value trends in Norwalk, Fairfield County and surrounding areas. Faced with data from an appraiser, the mortgage company will generally remove the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
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