Have equity in your home? Want a lower payment? An appraisal from Village Appraisal Ltd. can help you get rid of your PMI.It's typically understood that a 20% down payment is the standard when getting a mortgage. The lender's liability is generally only the difference between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and typical value fluctuations in the event a purchaser is unable to pay. During the recent mortgage upturn of the last decade, it became widespread to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy covers the lender in the event a borrower doesn't pay on the loan and the value of the house is less than what the borrower still owes on the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible. Opposite from a piggyback loan where the lender absorbs all the losses, PMI is lucrative for the lender because they acquire the money, and they get the money if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can refrain from bearing the expense of PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Wise home owners can get off the hook ahead of time. The law pledges that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. Because it can take many years to get to the point where the principal is only 20% of the initial amount borrowed, it's necessary to know how your home has grown in value. After all, any appreciation you've obtained over time counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood may not be following the national trends and/or your home could have gained equity before things simmered down. The difficult thing for many homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to recognize the market dynamics of our area. At Village Appraisal Ltd., we're masters at determining value trends in Lancaster, Fairfield County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will usually remove the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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