Let Willamette Valuations, LLC help you figure out if you can eliminate your PMIWhen buying a house, a 20% down payment is usually the standard. The lender's risk is oftentimes only the difference between the home value and the amount due on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and regular value fluctuations on the chance that a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower defaults on the loan and the market price of the property is lower than the loan balance. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible. It's money-making for the lender because they secure the money, and they receive payment if the borrower is unable to pay, separate from a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners refrain from bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Savvy homeowners can get off the hook beforehand. The law states that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. It can take many years to get to the point where the principal is just 20% of the original amount of the loan, so it's necessary to know how your home has grown in value. After all, all of the appreciation you've acquired over the years counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Despite the fact that nationwide trends forecast plummeting home values, be aware that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have gained equity before things cooled off. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Willamette Valuations, LLC, we know when property values have risen or declined. We're masters at recognizing value trends in Albany, Benton County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often cancel the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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