Let Tri-State Appraisals help you figure out if you can get rid of your PMI

A 20% down payment is typically accepted when buying a house. The lender's only risk is usually just the difference between the home value and the amount due on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and natural value variations in the event a purchaser defaults.

The market was taking down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower defaults on the loan and the market price of the property is lower than the loan balance.

Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible, PMI is pricey to a borrower. It's money-making for the lender because they collect the money, and they are covered if the borrower is unable to pay, different from a piggyback loan where the lender absorbs all the costs.


	Is PMI included in your monthly house payment? Call Tri-State Appraisals today at 304-541-2470 or 304-541-3807 or send us an e-mail. A new appraisal could save you thousands.

How homeowners can keep from bearing the expense of PMI

With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount on nearly all loans. Savvy home owners can get off the hook ahead of time. The law stipulates that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent.

It can take many years to get to the point where the principal is just 80% of the initial amount borrowed, so it's necessary to know how your West Virginia home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Even when nationwide trends forecast lower overall home values, understand that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have secured equity before things simmered down.

The hardest thing for most homeowners to figure out is just when their home's equity rises above the 20% point. A certified, West Virginia licensed real estate appraiser can definitely help. It is an appraiser's job to understand the market dynamics of their area. At Tri-State Appraisals, we're experts at recognizing value trends in Logan, Logan County, and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often do away with the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.


	Does your monthly loan payment have a lineitem for PMI? Call Tri-State Appraisals today at 304-541-2470 or 304-541-3807 or send us an e-mail. A new appraisal could save you thousands.

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