Have equity in your home? Want a lower payment? An appraisal from James Earp Appraisal Service can help you get rid of your PMI.When getting a mortgage, a 20% down payment is typically the standard. Since the risk for the lender is oftentimes only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and natural value fluctuationsin the event a purchaser doesn't pay. The market was working with down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan covers the lender in case a borrower defaults on the loan and the market price of the home is lower than what is owed on the loan. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. It's advantageous for the lender because they obtain the money, and they get paid if the borrower is unable to pay, separate 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 can a buyer refrain from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law guarantees that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, smart home owners can get off the hook a little earlier. Considering it can take countless years to get to the point where the principal is only 20% of the original amount of the loan, it's crucial to know how your home has increased in value. After all, every bit of appreciation you've gained over time counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be minding the national trends and/or your home could have secured equity before things cooled off, so even when nationwide trends signify decreasing home values, you should realize that real estate is local. 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 tough thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At James Earp Appraisal Service, we know when property values have risen or declined. We're experts at recognizing value trends in Raleigh, Wake County and surrounding areas. Faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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