Have equity in your home? Want a lower payment? An appraisal from Zack Grassley can help you get rid of your PMI.It's widely known that a 20% down payment is common when purchasing a home. The lender's risk is generally only the difference between the home value and the sum remaining on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and typical value variations on the chance that a purchaser defaults. Banks were taking 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. PMI covers the lender in case a borrower defaults on the loan and the value of the property is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible, PMI is costly to a borrower. It's lucrative for the lender because they secure the money, and they receive payment if the borrower doesn't pay, separate from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute homeowners can get off the hook beforehand. The law pledges that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. Because it can take many years to get to the point where the principal is just 20% of the original loan amount, it's important to know how your home has grown in value. After all, all of the appreciation you've achieved over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Despite the fact that nationwide trends predict decreasing home values, understand that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home may have secured equity before things settled down. The hardest thing for most home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. It's an appraiser's job to keep up with the market dynamics of their area. At Zack Grassley, we're masters at identifying value trends in Clarence, Shelby County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally do away with the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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