Giles Appraisal Group, Inc can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is typically the standard. The lender's risk is oftentimes only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value changes in the event a borrower is unable to pay. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be expensive to a borrower. Opposite from a piggyback loan where the lender consumes all the deficits, PMI is lucrative for the lender because they collect the money, and they get the money if the borrower is unable to 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 keep from paying PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Keen homeowners can get off the hook a little early. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. Since it can take many years to arrive at the point where the principal is just 20% of the original loan amount, it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends predict plummeting home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home may have gained equity before things cooled off. The difficult thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. It's an appraiser's job to keep up with the market dynamics of their area. At Giles Appraisal Group, Inc, we're experts at determining value trends in Panama City, Fl, Bay County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will usually eliminate the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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