Have equity in your home? Want a lower payment? An appraisal from Tierney Appraisals can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. The lender's risk is usually only the difference between the home value and the sum remaining on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and natural value fluctuations on the chance that a purchaser is unable to pay. The market was working with down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This additional policy takes care of the lender in case a borrower doesn't pay on the loan and the market price of the house is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible, PMI is pricey to a borrower. Opposite from a piggyback loan where the lender takes in all the losses, PMI is beneficial 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 homebuyers avoid bearing the expense of PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Wise homeowners can get off the hook beforehand. The law guarantees that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. It can take many years to arrive at the point where the principal is only 20% of the original loan amount, so it's important to know how your home has grown 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 fallen below the 80% threshold? Even when nationwide trends signify plunging home values, be aware that real estate is local. Your neighborhood may not be heeding the national trends and/or your home may have secured equity before things settled down. The hardest thing for most homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Tierney Appraisals, we know when property values have risen or declined. We're experts at recognizing value trends in Beverly, Essex County and surrounding areas. When faced with information from an appraiser, the mortgage company will often cancel the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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