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

A 20% down payment is usually the standard when purchasing a home. Because the liability for the lender is often only the remainder between the home value and the sum remaining on the loan, the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and typical value changes in the event a purchaser is unable to pay.

Banks were working with down payments as low as 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This additional plan takes care of the lender in case a borrower defaults on the loan and the market price of the house is less than what the borrower still owes on the loan.

Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and on many occasions isn't even tax deductible, PMI is pricey to a borrower. It's favorable for the lender because they collect the money, and they receive payment if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the deficits.


	Has your home value appreciated since you first purchased? Contact Merit Appraisal Service today at 573-204-3071 to see if you can save money by removing your Private Mortgage Insurance premium.

How can a homeowner refrain from paying PMI?

With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically cease the PMI when the principal balance of the loan equals 78 percent of the original loan amount on most loans. Keen homeowners can get off the hook a little earlier. The law states that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent.

Since it can take a significant number of years to reach the point where the principal is only 80% of the original amount borrowed, it's crucial to know how your Missouri home has grown in value. After all, all of the appreciation you've obtained over time counts towards removing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not follow national trends and/or your home may have gained equity before things cooled off. So even when nationwide trends forecast declining home values, you should know most importantly that real estate is local.

A certified, Missouri licensed real estate appraiser can help homeowners figure out if their equity has made it to the 20% point, as it's a hard thing to know. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Merit Appraisal Service, we're experts at determining value trends in Jackson, Cape Girardeau County, and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will often drop the PMI with little anxiety. At which time, the homeowner can enjoy the savings from that point on.


	Is PMI something increasing your monthly house payment? Call Merit Appraisal Service today at 573-204-3071 or send us an e-mail. Documentation of your home's current 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