Have equity in your home? Want a lower payment? An appraisal from Alexander Appraisals can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. Because the risk for the lender is usually only the difference between the home value and the amount remaining on the loan, the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and regular value variationsin the event a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to handle the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. This additional plan covers the lender in case a borrower doesn't pay on the loan and the market price of the house is less than the loan balance. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible. It's lucrative for the lender because they secure the money, and they get the money if the borrower is unable to pay, separate from a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer refrain from paying PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law promises that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, keen home owners can get off the hook ahead of time. It can take many years to reach the point where the principal is just 20% of the initial amount borrowed, so it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be heeding the national trends and/or your home may have acquired equity before things simmered down, so even when nationwide trends hint at falling home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Alexander Appraisals, we're masters at pinpointing value trends in Oak Creek, Milwaukee County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally do away with the PMI with little anxiety. At which time, the home owner can enjoy the savings from that point on.
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