Have equity in your home? Want a lower payment? An appraisal from Astute Appraisals, Inc. can help you get rid of your PMI.A 20% down payment is usually the standard when getting a mortgage. The lender's liability is oftentimes only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and typical value fluctuations in the event a purchaser doesn't pay. Banks were taking down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added plan covers the lender in case a borrower doesn't pay on the loan and the market price of the property is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible, PMI can be costly to a borrower. It's profitable for the lender because they obtain the money, and they receive payment if the borrower defaults, different from a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can prevent bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Wise homeowners can get off the hook sooner than expected. The law promises that, upon request of the home owner, 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 of the loan, so it's necessary to know how your home has increased in value. After all, all of the appreciation you've gained over time counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home could have gained equity before things cooled off, so even when nationwide trends signify plunging home values, you should understand that real estate is local. The hardest thing for almost all 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 keep up with the market dynamics of our area. At Astute Appraisals, Inc., we're experts at determining value trends in Columbia, Howard County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will generally drop the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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