Let Deer Creek Appraisals help you discover if you can eliminate your PMIA 20% down payment is usually the standard when buying a house. The lender's risk is generally only the remainder between the home value and the sum due on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, reselling the home, and regular value fluctuations on the chance that a purchaser defaults. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender endure the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan protects the lender if a borrower defaults on the loan and the value of the house is less than what is owed on the loan. PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the damages, PMI is favorable for the lender because they obtain the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers refrain from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Wise home owners can get off the hook beforehand. The law states that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to reach the point where the principal is only 20% of the initial amount of the loan, so it's important to know how your home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be adhering to the national trends and/or your home may have acquired equity before things cooled off, so even when nationwide trends hint at declining home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Deer Creek Appraisals, we're experts at recognizing value trends in Denver, Jefferson 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 often do away with the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
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