Let Thomas Residential/Commercial Appraisal Company, Inc. help you determine if you can eliminate your PMIWhen purchasing a home, a 20% down payment is usually the standard. Considering the risk for the lender is usually only the difference between the home value and the amount due on the loan, the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and regular value changesin the event a borrower is unable to pay. Lenders were accepting down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy covers the lender if a borrower doesn't pay on the loan and the market price of the property is lower than the balance of the loan. PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible. It's beneficial for the lender because they obtain the money, and they receive payment if the borrower is unable to pay, different from a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can refrain from bearing the cost of PMIWith the employment of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law stipulates that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, keen home owners can get off the hook sooner than expected. Considering it can take countless years to get to the point where the principal is just 20% of the original amount of the loan, it's essential to know how your home has increased in value. After all, any appreciation you've gained over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be following the national trends and/or your home may have acquired equity before things simmered down, so even when nationwide trends hint at falling home values, you should realize that real estate is local. The toughest thing for almost all homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to know the market dynamics of their area. At Thomas Residential/Commercial Appraisal Company, Inc., we're masters at analyzing value trends in Salisbury, Rowan County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will often drop the PMI with little trouble. At that time, the homeowner can enjoy the savings from that point on.
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