Have equity in your home? Want a lower payment? An appraisal can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. The lender's liability is often only the remainder between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and natural value fluctuations on the chance that a purchaser is unable to pay. During the recent mortgage boom of the last decade, it became widespread to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to handle the additional risk of the low down payment with Private Mortgage Insurance or PMI. This supplementary policy protects the lender in case a borrower defaults on the loan and the market price of the house is less than the loan balance. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn't even tax deductible. It's beneficial for the lender because they obtain the money, and they get the money if the borrower defaults, separate from a piggyback loan where the lender consumes all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners keep from paying PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Acute homeowners can get off the hook ahead of time. The law guarantees that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the initial loan amount, so it's important to know how your home has grown in value. After all, all of the appreciation you've gained over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be heeding the national trends and/or your home could have secured equity before things settled down, so even when nationwide trends signify plunging home values, you should realize that real estate is local. The hardest thing for almost all homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to know the market dynamics of their area. At Witherell & Associates, Inc., we're masters at recognizing value trends in Mountlake Terrace, Snohomish 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 usually do away with the PMI with little trouble. At which time, the homeowner can enjoy the savings from that point on.
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