Have equity in your home? Want a lower payment? An appraisal from Steyskal Home Appraisal LLC can help you get rid of your PMI.

When buying a house, a 20% down payment is usually the standard. Considering the liability for the lender is oftentimes only the remainder between the home value and the sum outstanding on the loan, the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and natural value variationsin the event a purchaser doesn't pay.

During the recent mortgage upturn of the mid 2000s, it became customary to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to handle the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplementary plan covers the lender in the event a borrower is unable to pay on the loan and the worth of the property is lower than what is owed on the loan.

PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible. Contradictory to a piggyback loan where the lender takes in all the costs, PMI is lucrative for the lender because they secure the money, and they get paid if the borrower defaults.

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 bearing the cost of PMI

The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute homeowners can get off the hook a little early. The law designates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent.

Considering it can take countless years to get to the point where the principal is only 20% of the original amount borrowed, it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've gained over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be minding the national trends and/or your home may have secured equity before things cooled off, so even when nationwide trends signify declining home values, you should understand that real estate is local.

An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to understand the market dynamics of their area. At Steyskal Home Appraisal LLC, we're experts at analyzing value trends in , Maricopa County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often drop the PMI with little effort. At which time, the homeowner can relish the savings from that point on.

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