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

When buying a house, a 20% down payment is usually the standard. Considering the risk for the lender is generally only the difference between the home value and the amount due on the loan, the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and regular value variationsin the event a purchaser is unable to pay.

Lenders were 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 handle the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplemental plan covers the lender if a borrower is unable to pay on the loan and the value of the house is less than the loan balance.

PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and often isn't even tax deductible. It's advantageous for the lender because they secure the money, and they get the money if the borrower is unable to pay, separate from a piggyback loan where the lender consumes all the damages.

Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.

How homeowners can keep from bearing the cost of PMI

With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Keen homeowners can get off the hook sooner than expected. The law designates that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent.

It can take many years to reach the point where the principal is just 20% of the original amount of the loan, so it's important to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not be heeding the national trends and/or your home might have acquired equity before things cooled off, so even when nationwide trends hint at falling home values, you should realize that real estate is local.

A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Crest Appraisal Services, we're masters at determining value trends in Seattle, King County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will usually cancel the PMI with little effort. At which time, the homeowner can delight in 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