Let Lance Appraisal Services help you decide if you can get rid of your PMIWhen buying a house, a 20% down payment is typically the standard. Since the risk for the lender is oftentimes only the remainder between the home value and the sum due on the loan, the 20% adds a nice buffer against the charges of foreclosure, selling the home again, and regular value changesin the event a borrower is unable to pay. Banks were taking down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to manage the added risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary plan covers the lender in the event a borrower doesn't pay on the loan and the value of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI is pricey to a borrower. It's money-making for the lender because they acquire the money, and they receive payment if the borrower doesn't pay, contradictory to a piggyback loan where the lender takes in 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 homeowners prevent paying PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law states that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, wise homeowners can get off the hook a little earlier. Since it can take countless years to arrive at the point where the principal is just 20% of the initial amount borrowed, it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Even when nationwide trends hint at decreasing home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have acquired equity before things cooled off. The toughest thing for almost all homeowners to know is just when their home's equity goes over 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 Lance Appraisal Services, we know when property values have risen or declined. We're experts at pinpointing value trends in Rehoboth, Bristol County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often remove the PMI with little effort. At that time, the home owner can relish the savings from that point on.
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