Have equity in your home? Want a lower payment? An appraisal from Northern Arizona Appraisal, Inc. can help you get rid of your PMI.A 20% down payment is typically accepted when purchasing a home. Since the liability for the lender is oftentimes only the difference between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the charges of foreclosure, reselling the home, and natural value changesin the event a purchaser is unable to pay. The market was working with down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the value of the property is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible, PMI can be pricey to a borrower. Contradictory to a piggyback loan where the lender absorbs all the damages, PMI is money-making for the lender because they collect the money, and they get paid if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers prevent paying PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, wise home owners can get off the hook ahead of time. It can take countless years to get to the point where the principal is only 20% of the original amount borrowed, so it's essential to know how your home has grown in value. After all, all of the appreciation you've achieved over time counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not be heeding the national trends and/or your home could have gained equity before things calmed down, so even when nationwide trends predict declining home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Northern Arizona Appraisal, Inc., we're experts at determining value trends in Phoenix, Maricopa County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually eliminate the PMI with little trouble. At which time, the home owner can retain the savings from that point on.
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