Have equity in your home? Want a lower payment? An appraisal from Salt Lake Appraising Company can help you get rid of your PMI.It's largely understood that a 20% down payment is accepted when buying a house. Considering the risk for the lender is oftentimes only the difference between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and regular value fluctuationsin the event a borrower doesn't pay. During the recent mortgage boom of the last decade, it was customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the value of the house is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible, PMI can be pricey to a borrower. Opposite from a piggyback loan where the lender absorbs all the costs, PMI is beneficial for the lender because they secure the money, and they get the money 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 homebuyers avoid paying PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, wise home owners can get off the hook ahead of time. It can take many years to reach the point where the principal is only 20% of the initial loan amount, so it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've achieved over time counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be adopting the national trends and/or your home might have secured equity before things settled down, so even when nationwide trends indicate plunging home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Salt Lake Appraising Company, we're masters at identifying value trends in Draper, Salt Lake County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will most often do away with the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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