Mitchell Appraisals can help you remove your Private Mortgage Insurance

It's largely known that a 20% down payment is accepted when buying a house. The lender's only exposure is typically just the remainder between the home value and the amount due on the loan, so the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and regular value changes in the event a purchaser doesn't pay.

During the recent mortgage boom that our country recently experienced, it became common to see lenders only asking for down payments of 10, 5, 3 or often 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower defaults on the loan and the market price of the property is less than the balance of the loan.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be costly to a borrower. It's lucrative for the lender because they acquire the money, and they get the money if the borrower defaults, in contrast to a piggyback loan where the lender takes in all the deficits.


	The savings from dropping your PMI will make up for the cost of the appraisal in no time. Nobody is more qualified than Mitchell Appraisals when it comes to appreciating values in the city of Navarre and Santa Rosa County. Contact us today.

How can buyers prevent paying PMI?

As a result of The Homeowners Protection Act of 1998, lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount on nearly all loans. Wise home owners can get off the hook a little earlier. The law promises that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent.

Because it can take a significant number of years to arrive at the point where the principal is only 80% of the initial loan amount, it's important to know how your Florida home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends forecast decreasing home values, realize that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have gained equity before things simmered down.

The toughest thing for almost all homeowners to figure out is just when their home's equity goes over the 20% point. An accredited, Florida licensed real estate appraiser can definitely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Mitchell Appraisals, we know when property values have risen or declined. We're masters at recognizing value trends in Navarre, Santa Rosa County, and surrounding areas. When faced with data from an appraiser, the mortgage company will usually remove the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.


	The amount you keep from dropping your PMI will make up for the price of the appraisal in a matter of months. Nobody is more qualified than Mitchell Appraisals when it comes to appreciating values in Navarre and Santa Rosa County. Contact us today.

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