Have equity in your home? Want a lower payment? An appraisal from Alaska Real Estate Appraisal can help you get rid of your PMI.When purchasing a home, a 20% down payment is usually the standard. Considering the risk for the lender is often only the remainder between the home value and the sum due on the loan, the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and typical value fluctuations on the chance that a borrower doesn't pay. The market was working with down payments of 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary plan protects the lender in the event a borrower defaults on the loan and the worth of the house is lower than the balance of the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and generally isn't tax deductible. Unlike a piggyback loan where the lender absorbs all the losses, PMI is money-making for the lender because they collect the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can avoid bearing the cost of PMIWith the utilization of The Homeowners Protection Act of 1998, lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount on nearly all loans. Wise home owners can be relived prior to that. The law guarantees that, at the request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. Considering it can take many years to arrive at the point where the principal is just 20% of the original loan amount, it's important to know how your home has appreciated in value. After all, every bit of appreciation you've gained over the years counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things settled down, so even when nationwide trends predict plunging home values, you should understand that real estate is local. The hardest thing for almost all home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At Alaska Real Estate Appraisal, we know when property values have risen or declined. We're masters at recognizing value trends in the Matanuska Susitna County and surrounding areas. Faced with information from an appraiser, the mortgage company will generally drop the PMI with little effort. At that time, the home owner can retain the savings from that point on.
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