Dundala Appraisals can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is usually the standard. The lender's liability is generally only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and natural value changes on the chance that a borrower doesn't pay. During the recent mortgage boom of the last decade, 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 low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower defaults on the loan and the market price of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be pricey to a borrower. Contradictory to a piggyback loan where the lender absorbs all the deficits, PMI is advantageous for the lender because they collect the money, and they get the money 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 owners avoid paying PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Keen home owners can get off the hook a little early. The law designates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. Since it can take countless years to reach the point where the principal is only 20% of the original amount of the loan, it's essential to know how your home has grown in value. After all, every bit of appreciation you've accomplished over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends predict plummeting home values, realize that real estate is local. Your neighborhood may not be heeding the national trends and/or your home might have gained equity before things calmed down. The hardest thing for almost all home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to recognize the market dynamics of their area. At Dundala Appraisals, we're masters at determining value trends in Glassboro, Philadelphia County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will often remove the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
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