Let Lenders Appraisal Service, Inc. help you determine if you can get rid of your PMI

It's typically inferred that a 20% down payment is accepted when buying a house. Because the risk for the lender is often only the remainder between the home value and the amount remaining on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and typical value changes in the event a purchaser doesn't pay.

Lenders were taking down payments as low as 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower than the balance of the loan.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible, PMI is costly to a borrower. It's advantageous for the lender because they acquire the money, and they receive payment if the borrower doesn't pay, different from a piggyback loan where the lender absorbs all the damages.


The money you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than Lenders Appraisal Service, Inc. when it comes to appreciating values in the city of Saint Paul and Dakota County. Contact us today.

How can home owners prevent bearing the expense of PMI?

The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Wise home owners can get off the hook a little earlier. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent.

Considering it can take several years to get to the point where the principal is only 80% of the original amount borrowed, it's necessary to know how your Minnesota home has increased in value. After all, all of the appreciation you've achieved over the years counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood might not adhere to national trends and/or your home might have gained equity before the economy declined. So even when nationwide trends hint at declining home values, you should know most importantly that real estate is local.

The hardest thing for most homeowners to figure out is just when their home's equity rises above the 20% point. A certified, Minnesota licensed real estate appraiser can certainly help. It is an appraiser's job to keep up with the market dynamics of their area. At Lenders Appraisal Service, Inc., we're experts at recognizing value trends in Saint Paul, Dakota County, and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will often eliminate the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.


The savings from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Lenders Appraisal Service, Inc. when it comes to appreciating values in Saint Paul and Dakota County. Contact us today.

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

 

Home Status Report

Want to know if a home is still on the market, or if the price has changed? We can help. Simply fill out the information below and with no obligation to you we'll get back to you with your requested information. We guarantee your privacy.

Your Information
Property Information