Have equity in your home? Want a lower payment? An appraisal from Northstar Appraisal, Inc. can help you get rid of your PMI.When getting a mortgage, a 20% down payment is typically the standard. Considering the liability for the lender is generally only the difference between the home value and the amount due on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and regular value fluctuationsin the event a borrower defaults. Lenders were working with down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplementary plan protects the lender if a borrower is unable to pay on the loan and the market price of the house is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible, PMI can be pricey to a borrower. It's lucrative for the lender because they secure the money, and they receive payment if the borrower is unable to pay, different from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner prevent paying PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Savvy homeowners can get off the hook a little early. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. It can take many 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 appreciated in value. After all, all of the appreciation you've obtained over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be adopting the national trends and/or your home could have acquired equity before things cooled off, 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 home owners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Northstar Appraisal, Inc., we're experts at pinpointing value trends in Portland, Cumberland County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will generally do away with the PMI with little anxiety. At that time, the home owner can enjoy the savings from that point on.
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