Steven W Backer, Appraiser/Consultant can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is typically the standard. Because the risk for the lender is generally only the difference between the home value and the amount outstanding on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value fluctuationsin the event a purchaser is unable to pay. During the recent mortgage boom of the last decade, it became customary to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender handle the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender if a borrower is unable to pay on the loan and the value of the property is lower than the loan balance. PMI can be pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible. Unlike a piggyback loan where the lender absorbs all the costs, PMI is lucrative 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 a homeowner prevent paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Savvy home owners can get off the hook a little early. The law promises that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. It can take many years to reach the point where the principal is just 20% of the initial amount of the loan, so it's important to know how your home has increased in value. After all, any appreciation you've acquired over time counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends predict plummeting home values, realize that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have secured equity before things cooled off. The hardest 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 surely help. It's an appraiser's job to keep up with the market dynamics of their area. At Steven W Backer, Appraiser/Consultant, we know when property values have risen or declined. We're masters at analyzing value trends in Somers, Flathead County and surrounding areas. When faced with data from an appraiser, the mortgage company will most often remove the PMI with little trouble. At that time, the home owner can retain the savings from that point on.
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