Have equity in your home? Want a lower payment? An appraisal from Kordik & Associates, Inc. can help you get rid of your PMI.A 20% down payment is typically the standard when getting a mortgage. Considering the liability for the lender is usually only the difference between the home value and the amount outstanding on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and natural value fluctuationson the chance that a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it was common to see lenders requiring down payments of 10, 5 or even 0 percent. A lender is able to manage the added risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the worth of the home is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI is pricey to a borrower. Different from a piggyback loan where the lender consumes all the losses, PMI is beneficial for the lender because they secure the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law promises that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, savvy homeowners can get off the hook a little earlier. It can take countless years to get to the point where the principal is just 20% of the original amount borrowed, so it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've accomplished over time counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be following the national trends and/or your home may have gained equity before things calmed down, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. As appraisers, it's our job to know the market dynamics of our area. At Kordik & Associates, Inc., we know when property values have risen or declined. We're masters at determining value trends in Elmhurst, Dupage County and surrounding areas. When faced with data from an appraiser, the mortgage company will most often eliminate the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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