Let Village Appraisal Ltd. help you figure out if you can get rid of your PMIWhen purchasing a home, a 20% down payment is typically the standard. Because the risk for the lender is oftentimes only the remainder between the home value and the amount due on the loan, the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and natural value variationson the chance that a borrower is unable to pay. Banks were taking down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower doesn't pay on the loan and the worth of the home is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. Different from a piggyback loan where the lender consumes all the losses, PMI is lucrative for the lender because they collect the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 requires 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 pledges that, at the request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, savvy homeowners 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 crucial to know how your home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends forecast plummeting home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home could have gained equity before things cooled off. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Village Appraisal Ltd., we know when property values have risen or declined. We're masters at determining value trends in Lancaster, Fairfield County and surrounding areas. When faced with data from an appraiser, the mortgage company will most often drop the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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