Independent Valuation Services can help you remove your Private Mortgage Insurance

When buying a house, a 20% down payment is typically the standard. The lender's only liability is generally just the difference between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and natural value changes on the chance that a borrower defaults.

During the recent mortgage upturn that our country recently experienced, it became customary to see lenders reducing down payments to 10, 5 or even 0 percent. A lender is able to handle the additional risk of the low down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower defaults on the loan and the market price of the home is less than what the borrower still owes on the loan.

PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible. It's lucrative for the lender because they collect the money, and they are covered if the borrower is unable to pay, as opposed to a piggyback loan where the lender consumes all the losses.


	Is PMI a part of your monthly house payment? Call Independent Valuation Services today at 952-440-3909 or send us an e-mail. A new appraisal could save you thousands.

How buyers can avoid bearing the expense of PMI

The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law designates that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. So, wise home owners can get off the hook a little earlier.

Since it can take several years to reach the point where the principal is just 80% of the original amount of the loan, it's important to know how your Minnesota home has increased in value. After all, all of the appreciation you've acquired over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends indicate declining home values, be aware that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home might have acquired equity before things simmered down.

An accredited, Minnesota licensed real estate appraiser can help home owners figure out just when their home's equity rises above the 20% point, as it's a difficult thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Independent Valuation Services, we know when property values have risen or declined. We're masters at analyzing value trends in Prior Lake, Scott County, and surrounding areas. When faced with information from an appraiser, the mortgage company will usually cancel the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.


	Is PMI a lineitem in your monthly house payment? Call Independent Valuation Services today at 952-440-3909 or send us an e-mail. Documentation of your home's present value 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