Let Prestige Appraisal, LLC help you figure out if you can eliminate your PMIWhen buying a house, a 20% down payment is typically the standard. The lender's liability is generally only the difference between the home value and the amount due on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and natural value fluctuations on the chance that a purchaser doesn't pay. The market was taking down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to manage the additional risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary plan covers the lender in case a borrower is unable to pay on the loan and the market price of the property is less than what the borrower still owes on the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible. It's favorable for the lender because they obtain the money, and they get the money if the borrower doesn't 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 home buyers keep from bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Acute homeowners can get off the hook a little early. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is only 20% of the original amount borrowed, so it's important to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home might have gained equity before things cooled off, so even when nationwide trends predict plunging home values, you should realize that real estate is local. The toughest thing for most home owners 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 recognize the market dynamics of our area. At Prestige Appraisal, LLC, we're experts at recognizing value trends in Sylva, Jackson County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually drop the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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