South Shore Appraisals can help you remove your Private Mortgage InsuranceIt's widely inferred that a 20% down payment is the standard when buying a house. Since the liability for the lender is usually only the remainder between the home value and the sum due on the loan, the 20% provides a nice cushion against the expenses of foreclosure, selling the home again, and regular value fluctuationsin the event a purchaser defaults. Lenders were working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender handle the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower defaults on the loan and the worth of the house is lower than the loan balance. PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible. It's beneficial for the lender because they collect the money, and they receive payment if the borrower is unable to pay, opposite from a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can refrain from paying PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law stipulates that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, wise home owners can get off the hook ahead of time. It can take countless years to reach the point where the principal is only 20% of the original amount borrowed, so it's crucial to know how your home has increased in value. After all, any appreciation you've accomplished over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Even when nationwide trends predict plummeting home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home could have acquired equity before things settled down. The toughest thing for many homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It is an appraiser's job to understand the market dynamics of their area. At South Shore Appraisals, we know when property values have risen or declined. We're masters at identifying value trends in Schererville, Lake County and surrounding areas. Faced with information from an appraiser, the mortgage company will generally remove the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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