Have equity in your home? Want a lower payment? An appraisal from James Earp Appraisal Service can help you get rid of your PMI.A 20% down payment is typically the standard when purchasing a home. The lender's risk is generally only the difference between the home value and the sum outstanding on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and regular value variations in the event a purchaser defaults. During the recent mortgage upturn of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the market price of the home is less than the loan balance. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible. It's money-making for the lender because they secure the money, and they get paid if the borrower doesn't pay, different from a piggyback loan where the lender absorbs all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can keep from bearing the cost of PMIThe Homeowners Protection Act of 1998 makes the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Keen homeowners can get off the hook a little earlier. The law pledges that, at the request of the home owner, the PMI must be released when the principal amount equals only 80 percent. Since it can take countless years to reach the point where the principal is only 20% of the initial loan amount, it's necessary to know how your home has grown in value. After all, all of the appreciation you've achieved over time counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Your neighborhood might not be reflecting the national trends and/or your home could have secured equity before things calmed down, so even when nationwide trends indicate plunging home values, you should realize that real estate is local. The difficult thing for most homeowners 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 know the market dynamics of our area. At James Earp Appraisal Service, we know when property values have risen or declined. We're masters at recognizing value trends in Raleigh, Wake County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually do away with the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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