Tim Hoover Appraisals can help you remove your Private Mortgage InsuranceIt's largely known that a 20% down payment is common when getting a mortgage. Because the liability for the lender is usually only the difference between the home value and the sum remaining on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and natural value fluctuationson the chance that a borrower is unable to pay. The market was accepting down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower is unable to pay on the loan and the value of the home is less than the balance of the loan. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and many times isn't even tax deductible. Separate from a piggyback loan where the lender absorbs all the losses, PMI is favorable for the lender because they collect the money, and they get paid 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 home buyers avoid bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law guarantees that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, smart homeowners can get off the hook a little early. Considering it can take countless years to reach the point where the principal is only 20% of the initial amount borrowed, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've obtained over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be heeding the national trends and/or your home may have acquired equity before things settled down, so even when nationwide trends forecast plunging home values, you should understand that real estate is local. An accredited, 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. It is an appraiser's job to recognize the market dynamics of their area. At Tim Hoover Appraisals, we're experts at analyzing value trends in Ottawa Hills, Lucas County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will most often do away with the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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