Appraisal Associates, LLC can help you remove your Private Mortgage Insurance

It's typically known that a 20% down payment is common when purchasing a home. The lender's risk is often only the remainder between the home value and the amount outstanding on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and natural value changes in the event a purchaser defaults.

During the recent mortgage boom of the last decade, it became widespread to see lenders reducing down payments to 10, 5, 3 or even 0 percent. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower is unable to pay on the loan and the market price of the house is less than what the borrower still owes on the loan.

PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible. Unlike a piggyback loan where the lender consumes all the losses, PMI is advantageous for the lender because they collect the money, and they get the money if the borrower is unable to pay.


	The money you keep from dropping your PMI pays for the appraisal in no time. Nobody is more qualified than Appraisal Associates, LLC when it comes to appreciating values in the city of Vancouver and Clark County. Contact us today.

How buyers can prevent bearing the cost of PMI

The Homeowners Protection Act of 1998 requires the lenders on the majority of loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, acute home owners can get off the hook sooner than expected.

It can take many years to reach the point where the principal is only 80% of the initial amount of the loan, so it's essential to know how your Washington home has increased in value. After all, any appreciation you've gained over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends signify declining home values, realize that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have secured equity before things simmered down.

A certified, Washington licensed real estate appraiser can help home owners figure out just when their home's equity rises above the 20% point, as it's a difficult thing to know. It is an appraiser's job to recognize the market dynamics of their area. At Appraisal Associates, LLC, we're experts at analyzing value trends in Vancouver, Clark 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 cancel the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.


	The savings from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than Appraisal Associates, LLC when it comes to appreciating values in Vancouver and Clark County. Contact us today.

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