Diversified Appraisal can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is typically the standard. The lender's liability is often only the remainder between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and natural value changes in the event a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became common to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the value of the property is less than the loan balance. PMI is costly to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender consumes all the costs, PMI is favorable for the lender because they obtain the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers prevent bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Smart home owners can get off the hook a little early. The law designates that, at the request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. Because it can take countless years to get to the point where the principal is just 20% of the original amount borrowed, it's essential to know how your home has appreciated in value. After all, all of the appreciation you've obtained over the years counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have gained equity before things calmed down. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Diversified Appraisal, we're masters at identifying value trends in Huntingdon, Huntingdon County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.
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