Have equity in your home? Want a lower payment? An appraisal from Kordik & Associates, Inc. can help you get rid of your PMI.When getting a mortgage, a 20% down payment is typically the standard. Because the risk for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and typical value variationson the chance that a purchaser doesn't pay. During the recent mortgage boom of the last decade, it became widespread to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added plan guards the lender in the event a borrower defaults on the loan and the market price of the property is less than what is owed on the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible. It's advantageous for the lender because they acquire the money, and they get paid if the borrower is unable to pay, unlike a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can avoid paying PMIThe Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, keen home owners can get off the hook sooner than expected. It can take countless years to arrive at the point where the principal is just 20% of the original amount borrowed, so it's essential to know how your home has increased in value. After all, every bit of appreciation you've obtained over time counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends hint at falling home values, understand that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have gained equity before things calmed down. The difficult thing for many homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Kordik & Associates, Inc., we're experts at recognizing value trends in Elmhurst, Dupage 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 do away with the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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