Blue Water Appraisals can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. Since the risk for the lender is usually only the difference between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and regular value fluctuationsin the event a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender handle the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower doesn't pay on the loan and the value of the property is less than what is owed on the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. Contradictory to a piggyback loan where the lender takes in all the losses, PMI is money-making 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 bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute homeowners can get off the hook a little earlier. The law promises that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. It can take countless years to get to the point where the principal is just 20% of the original amount borrowed, so it's important to know how your home has grown in value. After all, all of the appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood may not be heeding the national trends and/or your home might have secured equity before things simmered down, so even when nationwide trends indicate falling home values, you should understand that real estate is local. The hardest thing for many home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Blue Water Appraisals, we know when property values have risen or declined. We're masters at analyzing value trends in North Fort Myers, Lee County and surrounding areas. When faced with information from an appraiser, the mortgage company will generally do away with the PMI with little trouble. At that time, the homeowner can retain the savings from that point on.
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