TIRED OF PAYING PMI?

If you purchased your home with less than 20% down, more than likely you were stuck paying private mortgage insurance, more commonly referred to as PMI. The good news is that when you’ve paid down your mortgage to 80% of the value of your home, you can appeal to your lender to have PMI removed and stop paying those pesky fees that drive your monthly mortgage payment up. But the bad news is that many homeowners in the nation might be stuck with the burden of PMI for much longer than they had anticipated.

The PMI Group, Inc., a company that provides residential mortgage insurance to mortgage lenders, capital market participants, and investors throughout the United States, released its PMI U.S. Market Risk Index this year, a study that measures geographic house-price risk by predicting the probability of a regional decline in home prices in the nation’s 50 largest metropolitan statistical areas (MSAs) and metropolitan statistical area divisions (MSADs) over a two year period. 34 out of 50 of the major areas included in the study saw an increase in scores, which could be daunting news for many homeowners, especially those stuck with PMI.

But luckily, it looks like Denver homeowners are in the clear, good news for once in a somewhat shaky market. According to the index, Denver ranked 38^th in the nation with a score of 188. The index scale ranges from one to 1,000 and translates to a percentage. For example, a score of 100 indicates a 10 percent chance of a decline in home prices over the next two years.

The PMI U.S. Market Risk Index is based on the House Price Index from the Office of Federal Housing Enterprise Oversight (OFHEO), labor market statistics from the Bureau of Labor Statistics, and the PMI Affordability Index, which uses local median household income, home price appreciation, and the price of a conventional mortgage to calculate the local share of mortgage payment to income relative to its baseline year of 1995.

If you’re considering appealing to your lender to have PMI removed or you’re simply curious about the value of your home, it’s best to contact an experienced residential real estate appraiser to evaluate your home. The appraiser will inspect your home, examine comparable, recent sales in your area, and determine a reasonable value.

If you have questions about PMI, give us a call. Even if you’re ineligible to have PMI removed based on your home’s value, you may be able to refinance your loan to have PMI removed. Give us a call today to discuss your options.