Northern Arizona Appraisal, Inc. can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is typically the standard. The lender's risk is generally only the difference between the home value and the sum due on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and natural value fluctuations in the event a borrower doesn't pay. During the recent mortgage upturn of the last decade, it was customary to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplemental policy covers the lender in case a borrower is unable to pay on the loan and the market price of the property is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI is costly to a borrower. Contradictory to a piggyback loan where the lender takes in all the deficits, PMI is profitable for the lender because they collect the money, and they get paid if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers avoid paying PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law promises that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, keen home owners can get off the hook a little earlier. It can take countless years to get to the point where the principal is only 20% of the original amount borrowed, so it's essential to know how your home has increased in value. After all, all of the appreciation you've accomplished over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be following the national trends and/or your home might have gained equity before things cooled off, so even when nationwide trends indicate declining home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It is an appraiser's job to recognize the market dynamics of their area. At Northern Arizona Appraisal, Inc., we're experts at analyzing value trends in Phoenix, Maricopa County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will often remove the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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