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

When buying a house, a 20% down payment is usually the standard. Because the risk for the lender is often only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value variationsin the event a borrower doesn't pay.

Lenders were working with down payments down 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 low down payment with Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender if a borrower is unable to pay on the loan and the market price of the home is lower than the loan balance.

PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible. It's advantageous for the lender because they obtain the money, and they get paid if the borrower doesn't pay, opposite from a piggyback loan where the lender absorbs all the costs.

Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.

How can homeowners keep from bearing the expense of PMI?

The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, smart home owners can get off the hook sooner than expected.

It can take many years to get to the point where the principal is only 20% of the initial amount of the loan, so it's important to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over the years counts towards dismissing PMI. So why should you 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, be aware that real estate is local. Your neighborhood might not be minding the national trends and/or your home may have acquired equity before things settled down.

An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Mountain High Appraisals, LLC, we're experts at recognizing value trends in Denver, Denver County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally cancel the PMI with little effort. At which time, the home owner can delight in the savings from that point on.

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