Have equity in your home? Want a lower payment? An appraisal from Astute Appraisals, Inc. can help you get rid of your PMI.It's widely understood that a 20% down payment is common when buying a house. The lender's liability is generally only the remainder between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and regular value changes in the event a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This additional plan guards the lender if a borrower defaults on the loan and the market price of the house is lower than the balance of the loan. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible. It's favorable for the lender because they secure the money, and they receive payment if the borrower is unable to pay, opposite from a piggyback loan where the lender takes in 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 homebuyers prevent paying PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law guarantees that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. So, keen home owners can get off the hook ahead of time. It can take many years to get to the point where the principal is just 20% of the original loan amount, so it's crucial to know how your home has increased in value. After all, all of the appreciation you've achieved over time counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends hint at falling home values, understand that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home may have acquired equity before things calmed down. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Astute Appraisals, Inc., we're masters at pinpointing value trends in Columbia, Howard 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 most often cancel the PMI with little anxiety. At that time, the homeowner can retain the savings from that point on.
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