Stutzman Appraisal Service can help you remove your Private Mortgage InsuranceIt's generally known that a 20% down payment is accepted when getting a mortgage. The lender's risk is generally only the difference between the home value and the sum outstanding on the loan, so the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and natural value fluctuations on the chance that a borrower defaults. During the recent mortgage boom of the last decade, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower doesn't pay on the loan and the worth of the house is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI is costly to a borrower. Opposite from a piggyback loan where the lender absorbs all the deficits, PMI is profitable for the lender because they acquire the money, and they get paid if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can avoid bearing the cost of PMIWith the implementation 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 equals 78 percent of the beginning loan amount. The law stipulates that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, savvy home owners can get off the hook a little early. It can take many years to get to the point where the principal is just 20% of the original loan amount, so it's essential to know how your home has appreciated in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends forecast declining home values, be aware that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have gained equity before things settled down. The hardest thing for most home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to recognize the market dynamics of our area. At Stutzman Appraisal Service, we know when property values have risen or declined. We're masters at analyzing value trends in Yuma, Yuma County and surrounding areas. When faced with data from an appraiser, the mortgage company will usually drop the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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