Have equity in your home? Want a lower payment? An appraisal from Daniel Todd Appraisal Services, LLC can help you get rid of your PMI.

A 20% down payment is typically the standard when buying a house. Considering the liability for the lender is usually only the remainder between the home value and the sum due on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value changesin the event a purchaser is unable to pay.

The market was working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added policy protects the lender in case a borrower doesn't pay on the loan and the market price of the house is lower than the loan balance.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI can be costly to a borrower. Separate from a piggyback loan where the lender absorbs all the damages, PMI is beneficial for the lender because they secure the money, and they get the money 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 a homeowner keep from bearing the expense of PMI?

With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law pledges that, at the request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. So, keen homeowners can get off the hook a little early.

It can take many years to arrive at the point where the principal is only 20% of the initial amount borrowed, so it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends predict falling home values, realize that real estate is local. Your neighborhood might not be following the national trends and/or your home could have gained equity before things calmed down.

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's an appraiser's job to know the market dynamics of their area. At Daniel Todd Appraisal Services, LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Bloomington, Monroe County and surrounding areas. When faced with information from an appraiser, the mortgage company will often remove the PMI with little trouble. At which time, the homeowner can retain the savings from that point on.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year