Have equity in your home? Want a lower payment? An appraisal from Vincent Melone can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. The lender's liability is often only the difference between the home value and the sum due on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value fluctuations in the event a borrower defaults. Banks were 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 added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy covers the lender in case a borrower doesn't pay on the loan and the value of the property is lower than what is owed on the loan. PMI can be pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible. It's profitable for the lender because they collect the money, and they get the money if the borrower doesn't pay, different from a piggyback loan where the lender takes in 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 buyer refrain from bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, acute homeowners can get off the hook a little earlier. It can take countless years to reach the point where the principal is only 20% of the original amount of the loan, so it's essential to know how your home has increased in value. After all, all of the appreciation you've accomplished over the years counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends indicate plummeting home values, realize that real estate is local. Your neighborhood may not be following the national trends and/or your home could have secured equity before things settled down. The difficult thing for almost all homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It's an appraiser's job to know the market dynamics of their area. At Vincent Melone, we know when property values have risen or declined. We're experts at analyzing value trends in North Haledon, Passaic County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally do away with the PMI with little trouble. At which time, the homeowner can enjoy the savings from that point on.
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