Let ARV, Inc (Accurate Realestate Value) help you learn if you can get rid of your PMI.

When purchasing a home, a 20% down payment is usually the standard. The lender's only risk is often just the difference between the home value and the balance outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value changes in the event a purchaser is unable to pay.

During the recent mortgage boom of the mid 2000s, it was common to see lenders reducing down payments to 10, 5, 3 or often 0 percent. A lender is able to manage the additional risk of the low down payment with Private Mortgage Insurance or PMI. This added plan takes care of the lender in case a borrower defaults on the loan and the market price of the home is lower than what the borrower still owes on the loan.

Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and on many occasions isn't even tax deductible, PMI is costly to a borrower. Different from a piggyback loan where the lender consumes all the deficits, PMI is advantageous for the lender because they obtain the money, and they receive payment if the borrower doesn't pay.

The money you keep from cancelling your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than ARV, Inc when it comes to appreciating values in the counties of Macomb, Oakland, and Wayne. Contact us today.

How buyers can prevent paying PMI

As a result of The Homeowners Protection Act of 1998, lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount on most loans. The law stipulates that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. So, acute home owners can get off the hook a little earlier.

It can take several years to reach the point where the principal is only 80% of the initial amount of the loan, so it's necessary to know how your Michigan home has increased in value. After all, every bit of appreciation you've achieved over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not follow national trends and/or your home might have gained equity before the economy declined. So even when nationwide trends hint at a reduction in home values, you should realize that real estate is local.

A certified, Michigan licensed real estate appraiser can help home owners figure out if their equity has made it to the 20% point, as it's a tough thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Accurate Realestate Value, Inc, we know when property values have risen or declined. We're experts at recognizing value trends in Dearborn, Wayne County, and surrounding areas. Faced with information from an appraiser, the mortgage company will generally drop the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.

Is PMI a lineitem in your monthly house payment? Call Accurate Realestate Value, Inc today at (313) 982-7034 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