Haberer Appraisal Service can help you remove your Private Mortgage InsuranceIt's largely understood that a 20% down payment is common when buying a house. Since the liability for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and regular value changesin the event a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. PMI covers the lender if a borrower doesn't pay on the loan and the market price of the property is lower than the balance of the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible. It's profitable for the lender because they secure the money, and they get paid if the borrower doesn't pay, opposite from a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can keep from paying PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law states that, at the request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, smart homeowners can get off the hook sooner than expected. It can take many years to arrive at the point where the principal is just 20% of the original loan amount, so it's necessary to know how your home has appreciated in value. After all, any appreciation you've gained over the years counts towards dismissing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends indicate decreasing home values, you should understand that real estate is local. The hardest thing for most home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to know the market dynamics of our area. At Haberer Appraisal Service, we're masters at analyzing value trends in Clay Center, Clay 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 trouble. At which time, the homeowner can relish the savings from that point on.
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