Have equity in your home? Want a lower payment? An appraisal from DenverT Appraisal can help you get rid of your PMI.A 20% down payment is usually accepted when buying a house. The lender's risk is often only the difference between the home value and the sum remaining on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value changes on the chance that a borrower is unable to pay. During the recent mortgage boom of the last decade, it became customary to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender handle the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the market price of the house is less than what the borrower still owes on the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible. It's beneficial for the lender because they collect the money, and they get paid if the borrower is unable to pay, contradictory to 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 homebuyers keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law designates that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, savvy home owners can get off the hook a little early. It can take many years to reach 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, all of the appreciation you've achieved over the years counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have acquired equity before things cooled off. The toughest thing for most home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to recognize the market dynamics of their area. At DenverT Appraisal, we're masters at analyzing value trends in West End, Moore 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 do away with the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.
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