Let Northern Arizona Appraisal, Inc. help you decide if you can eliminate your PMIA 20% down payment is typically the standard when purchasing a home. Since the liability for the lender is often only the remainder between the home value and the amount remaining on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value fluctuationson the chance that a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders requiring down payments of 10, 5 or often 0 percent. How does a lender handle the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower is unable to pay on the loan and the market price of the property is lower than what is owed on the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. Contradictory to a piggyback loan where the lender absorbs all the losses, PMI is money-making for the lender because they collect the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can refrain from bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Smart home owners can get off the hook a little early. The law pledges that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. Since it can take countless years to arrive at the point where the principal is only 20% of the initial amount of the loan, it's important to know how your home has grown in value. After all, every bit of appreciation you've gained over time counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends hint at plunging home values, realize that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things simmered down. 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 difficult thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Northern Arizona Appraisal, Inc., we're masters at pinpointing value trends in Phoenix, Maricopa 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 often cancel the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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