Have equity in your home? Want a lower payment? An appraisal from MCM Appraisal, LLC can help you get rid of your PMI.When purchasing a home, a 20% down payment is usually the standard. The lender's risk is often only the remainder between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and typical value variations in the event a borrower defaults. During the recent mortgage boom of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added policy guards the lender in case a borrower doesn't pay on the loan and the market price of the home is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI is costly to a borrower. Different from a piggyback loan where the lender consumes all the losses, PMI is lucrative for the lender because they collect the money, and they get paid 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 can home buyers avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law promises that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, wise home owners can get off the hook ahead of time. It can take many years to reach the point where the principal is just 20% of the initial amount borrowed, so it's necessary to know how your home has increased in value. After all, any appreciation you've achieved over time counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home might have secured equity before things simmered down, so even when nationwide trends indicate falling home values, you should realize that real estate is local. The difficult thing for many home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to understand the market dynamics of their area. At MCM Appraisal, LLC, we're masters at recognizing value trends in Portland, Multnomah County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally drop the PMI with little effort. At that time, the homeowner can retain the savings from that point on.
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