James Earp Appraisal Service can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. Considering the risk for the lender is generally only the remainder between the home value and the sum outstanding on the loan, the 20% adds a nice buffer against the charges of foreclosure, reselling the home, and natural value fluctuationson the chance that a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplementary plan takes care of the lender in case a borrower defaults on the loan and the value of the property is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. It's advantageous for the lender because they collect the money, and they receive payment if the borrower doesn't pay, different from 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 a home buyer prevent bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law pledges that, at the request of the home owner, the PMI must be released when the principal amount equals only 80 percent. So, acute homeowners can get off the hook sooner than expected. 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 necessary to know how your home has appreciated in value. After all, any appreciation you've accomplished over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends hint at falling home values, be aware that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home could have acquired equity before things settled down. 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 difficult 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 often do away with the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
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