Have equity in your home? Want a lower payment? An appraisal from Blue Water Appraisals can help you get rid of your PMI.It's widely understood that a 20% down payment is accepted when buying a house. The lender's risk is generally only the remainder between the home value and the sum remaining on the loan, so the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and natural value variations in the event a purchaser is unable to pay. During the recent mortgage boom of the last decade, it was customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender handle the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added plan protects the lender if a borrower is unable to pay on the loan and the market price of the home is lower than the loan balance. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible. Separate from a piggyback loan where the lender absorbs all the deficits, PMI is money-making for the lender because they acquire 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 home owners can prevent bearing the cost of PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law designates that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, smart homeowners can get off the hook a little early. Because it can take countless years to get to the point where the principal is just 20% of the original amount of the loan, it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not be adhering to the national trends and/or your home could have gained equity before things calmed down, so even when nationwide trends predict declining home values, you should realize that real estate is local. The difficult thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Blue Water Appraisals, we're experts at identifying value trends in North Fort Myers, Lee County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will often drop the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
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