Let Mulcock Appraising help you decide if you can get rid of your PMIWhen buying a house, a 20% down payment is usually the standard. The lender's liability is usually only the difference between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and typical value changes in the event a borrower defaults. The market was working with down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower defaults on the loan and the worth of the house is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI is pricey to a borrower. Separate from a piggyback loan where the lender absorbs all the deficits, PMI is advantageous for the lender because they acquire the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer prevent bearing the cost of 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 pledges that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, smart home owners can get off the hook a little early. It can take countless years to arrive at the point where the principal is just 20% of the original amount of the loan, so it's essential to know how your home has grown in value. After all, any appreciation you've obtained over time counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be minding the national trends and/or your home may have gained equity before things cooled off, so even when nationwide trends predict decreasing home values, you should realize that real estate is local. The difficult thing for most home owners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to know the market dynamics of our area. At Mulcock Appraising, we know when property values have risen or declined. We're experts at determining value trends in Salt Lake City, Salt Lake County and surrounding areas. Faced with figures from an appraiser, the mortgage company will often drop the PMI with little effort. At which time, the home owner can relish the savings from that point on.
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