Let Commonwealth Real Estate Appraisals, LLC. help you decide if you can eliminate your PMIIt's largely known that a 20% down payment is common when purchasing a home. The lender's risk is usually only the difference between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and natural value fluctuations in the event a purchaser defaults. Lenders were 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 endure the added risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary plan takes care of the lender if a borrower doesn't pay on the loan and the value of the home is less than the loan balance. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. It's beneficial for the lender because they obtain the money, and they get paid if the borrower doesn't pay, separate from a piggyback loan where the lender consumes 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?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law states that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, acute home owners can get off the hook a little early. Since it can take many years to arrive at the point where the principal is only 20% of the initial amount of the loan, it's important to know how your home has grown in value. After all, all of the appreciation you've accomplished over time counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home might have gained equity before things simmered down, so even when nationwide trends predict decreasing home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Commonwealth Real Estate Appraisals, LLC., we know when property values have risen or declined. We're experts at analyzing value trends in Mechanicsville, King William County and surrounding areas. Faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little anxiety. At which time, the homeowner can enjoy the savings from that point on.
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