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

When getting a mortgage, a 20% down payment is usually the standard. The lender's liability is oftentimes only the difference between the home value and the sum remaining on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and typical value fluctuations in the event a borrower defaults.

The market was taking down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the market price of the home is less than what is owed on the loan.

Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible, PMI is pricey to a borrower. It's favorable for the lender because they collect the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender consumes all the losses.

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

How can a home buyer keep from paying PMI?

The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute home owners can get off the hook beforehand. The law stipulates that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent.

Because it can take many years to arrive at the point where the principal is only 20% of the initial amount borrowed, it's essential to know how your home has grown in value. After all, all of the appreciation you've accomplished over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood might not be minding the national trends and/or your home may have acquired equity before things simmered down, so even when nationwide trends signify falling home values, you should understand that real estate is local.

A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Appraisal Advisors Group, we're masters at identifying value trends in Caguas, Caguas 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 do away with the PMI with little effort. At which time, the homeowner can relish 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