Have equity in your home? Want a lower payment? An appraisal from a la mode can help you get rid of your PMI.A 20% down payment is typically accepted when buying a house. Since the liability for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and regular value fluctuationsin the event a borrower is unable to pay. The market was working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. A lender is able to handle the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI protects the lender if a borrower is unable to pay on the loan and the value of the house is lower than what the borrower still owes on the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible. Different from a piggyback loan where the lender consumes all the costs, PMI is money-making for the lender because they obtain the money, and they get the money 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 can homebuyers avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law promises that, upon request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. So, wise home owners can get off the hook sooner than expected. It can take many years to arrive at the point where the principal is just 20% of the original loan amount, so it's necessary to know how your home has appreciated in value. After all, any appreciation you've achieved over the years counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends hint at falling home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have acquired equity before things settled down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to know the market dynamics of our area. At a la mode, we're masters at recognizing value trends in Tooele, Tooele County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often drop the PMI with little effort. At which time, the home owner can retain the savings from that point on.
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