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Have equity in your home? Want a lower payment? An appraisal from Premier Appraisals can help you get rid of your PMI.

A 20% down payment is typically accepted when purchasing a home. The lender's only liability is often just the remainder between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and regular value variations in the event a purchaser defaults.

During the recent mortgage upturn of the last decade, it became common to see lenders reducing down payments to 10, 5 or sometimes 0 percent. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. This supplemental policy covers the lender in case a borrower defaults on the loan and the value of the home is less than what is owed on the loan.

PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible. Unlike a piggyback loan where the lender absorbs all the costs, PMI is money-making for the lender because they secure the money, and they get paid if the borrower is unable to pay.


Does your monthly mortgage payment include a fee PMI? Call Premier Appraisals today at 7013914489 or send us an e-mail. A new appraisal could save you thousands.

How buyers can prevent paying PMI

As a result of The Homeowners Protection Act of 1998, lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount on nearly all loans. Savvy homeowners can get off the hook ahead of time. The law guarantees that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent.

It can take several years to reach the point where the principal is only 80% of the original loan amount, so it's necessary to know how your North Dakota home has increased in value. After all, any appreciation you've accomplished over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Even when nationwide trends indicate falling home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home could have acquired equity before things cooled off.

A certified, North Dakota licensed real estate appraiser can help home owners figure out just when their home's equity goes over the 20% point, as it's a difficult thing to know. It's an appraiser's job to know the market dynamics of their area. At Premier Appraisals, we're experts at analyzing value trends in Bismark, Burleigh County, and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally drop the PMI with little effort. At that time, the home owner can retain the savings from that point on.


Does your monthly house payment include a fee for PMI? Call Premier Appraisals today at 7013914489 or send us an e-mail. Documentation of your home's present 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