Let GIZZI APPRAISAL SERVICE INC. help you decide if you can get rid of your PMI

A 20% down payment is usually accepted when buying a house. The lender's only liability is usually just the difference between the home value and the amount outstanding on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and natural value changes in the event a borrower is unable to pay.

Lenders were accepting down payments discounted to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than the loan balance.

Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be costly to a borrower. It's profitable for the lender because they acquire the money, and they receive payment if the borrower doesn't pay, as opposed to a piggyback loan where the lender consumes all the deficits.


	Does your monthly mortgage payment have a lineitem for PMI? Call GIZZI APPRAISAL SERVICE INC. today at 239-829-0017 or send us an e-mail. A current appraisal could save you thousands.

How can buyers avoid paying PMI?

The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law designates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, keen home owners can get off the hook sooner than expected.

Because it can take several years to arrive at the point where the principal is only 80% of the initial amount of the loan, it's essential to know how your Florida home has increased in value. After all, all of the appreciation you've obtained over the years counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not follow national trends and/or your home might have acquired equity before things simmered down. So even when nationwide trends predict falling home values, you should know most importantly that real estate is local.

The difficult thing for many consumers 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. As appraisers, it's our job to know the market dynamics of our area. At GIZZI APPRAISAL SERVICE INC., we know when property values have risen or declined. We're masters at identifying value trends in CAPE CORAL, Lee County, and surrounding areas. Faced with information from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.


	Does your monthly house payment have a lineitem for PMI? Call GIZZI APPRAISAL SERVICE INC. today at 239-829-0017 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