ALLIED REAL ESTATE APPRAISERS, INC. can help you remove your Private Mortgage Insurance

A 20% down payment is typically accepted when getting a mortgage. Considering the liability for the lender is oftentimes only the difference between the home value and the amount due on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and regular value changes in the event a purchaser defaults.

During the recent mortgage upturn of the last decade, it was common to see lenders only asking for down payments of 10, 5, 3 or even 0 percent. A lender is able to manage the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than what is owed on the loan.

PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and on many occasions isn't even tax deductible. Unlike a piggyback loan where the lender absorbs all the costs, PMI is beneficial for the lender because they secure the money, and they get the money if the borrower defaults.


	The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the price of the appraisal in no time. ALLIED REAL ESTATE APPRAISERS, INC. are experts when it comes to value trends in the city of Flint and Genesee County. Contact us today.

How can a homebuyer refrain from bearing the expense of PMI?

As a result of The Homeowners Protection Act of 1998, lenders are forced to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount on nearly all loans. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. So, savvy homeowners can get off the hook a little earlier.

Since it can take many years to arrive at the point where the principal is only 80% of the initial amount borrowed, it's essential to know how your Michigan home has grown in value. After all, every bit of appreciation you've acquired over time counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Your neighborhood may not adhere to national trends and/or your home could have secured equity before things declined. So even when nationwide trends hint at decreasing home values, you should understand that real estate is local.

The difficult thing for most consumers to figure out is whether their home equity has exceeded the 20% point. An accredited, Michigan licensed real estate appraiser can certainly help. As appraisers, it's our job to understand the market dynamics of our area. At ALLIED REAL ESTATE APPRAISERS, INC., we're masters at recognizing value trends in Flint, Genesee County, and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally do away with the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.


	Is PMI something increasing your monthly mortgage payment? Call ALLIED REAL ESTATE APPRAISERS, INC. today at (810) 767-1444 or send us an e-mail. A current appraisal could save you thousands.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year