Have equity in your home? Want a lower payment? An appraisal from The Appraisal Shop can help you get rid of your PMI.When getting a mortgage, a 20% down payment is usually the standard. The lender's liability is oftentimes only the remainder between the home value and the sum remaining on the loan, so the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and typical value fluctuations on the chance that a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it was common to see lenders requiring down payments of 10, 5 or often 0 percent. How does a lender manage the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplementary plan covers the lender in the event a borrower defaults on the loan and the value of the house is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and often isn't even tax deductible, PMI is costly to a borrower. Different from a piggyback loan where the lender absorbs all the deficits, PMI is beneficial for the lender because they collect the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers refrain from bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law promises that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, savvy home owners can get off the hook sooner than expected. Considering it can take many years to get to the point where the principal is just 20% of the original amount of the loan, it's crucial to know how your home has grown in value. After all, any appreciation you've achieved over time counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Even when nationwide trends hint at plummeting home values, realize that real estate is local. Your neighborhood may not be adopting the national trends and/or your home may have acquired equity before things calmed down. The toughest thing for almost all home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At The Appraisal Shop, we're masters at identifying value trends in Dublin, Delaware 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 eliminate the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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