Tierney Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is typically accepted when buying a house. Because the liability for the lender is generally only the remainder between the home value and the sum due on the loan, the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and regular value variationsin the event a borrower is unable to pay. During the recent mortgage boom of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower defaults on the loan and the worth of the house is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible, PMI can be expensive to a borrower. Separate from a piggyback loan where the lender absorbs all the damages, PMI is lucrative for the lender because they obtain 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 buyers prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Smart homeowners can get off the hook sooner than expected. The law pledges that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. Because it can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, it's crucial to know how your home has grown in value. After all, all of the appreciation you've obtained over time counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be following the national trends and/or your home could have gained equity before things settled down, so even when nationwide trends predict plummeting home values, you should understand that real estate is local. The hardest thing for most homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It is an appraiser's job to know the market dynamics of their area. At Tierney Appraisals, we're masters at recognizing value trends in Beverly, Essex 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 usually drop the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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