Have equity in your home? Want a lower payment? An appraisal from Adams Appraisal Svcs. LLC can help you get rid of your PMI.

     Could you use and extra $4,800 a year?  When getting a mortgage, a 20% down payment is usually the standard. Because the liability for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and natural value changes on the chance that a purchaser is unable to pay.

     Down payments of 10, 5 and even 0 percent over the last decade was not uncommon.  Lenders manage the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the property is lower than the balance of the loan.

     PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible. Recent changes in the market prices has caused values to increase, which means your equity may have increased above 20 percent just due to market changes.  Eliminating PMI could provide substantial increase in monthly saving.

Does your monthly mortgage payment include Private Mortgage Insurance? Contact us, eliminating PMI could be a substantial savings for you.

How can buyers keep from bearing the expense of PMI?

With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Savy home owners can get off the hook beforehand. The law pledges that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent.

It can take many years to reach the point where the principal is only 20% of the original loan amount, so it's necessary to know how your home has grown in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Current trends indicate increasing home values and your home could have secured equity above 20%.

The toughest thing for many home owners 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 understand the market dynamics of their area. At Adams Appraisal Svcs. LLC, we're experts at recognizing value trends in Aurora, Arapahoe 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 most often remove the PMI with little anxiety. At that time, the homeowner can retain the savings from that point on.  

Want to learn more about PMI and the process to protect yourself when obtaining a loan?  Click this link: https://www.consumerfinance.gov/policy-compliance/guidance/supervision-examinations/homeowners-protection-act-hpa-or-pmi-cancellation-act-examination-procedures/