Have equity in your home? Want a lower payment? An appraisal from Homestead Appraisals can help you get rid of your PMI.When buying a house, a 20% down payment is usually the standard. Since the risk for the lender is usually only the remainder between the home value and the amount due on the loan, the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and natural value fluctuationsin the event a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it became common to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender handle the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender if a borrower doesn't pay on the loan and the market price of the property is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and generally isn't even tax deductible, PMI is costly to a borrower. It's favorable for the lender because they acquire the money, and they get paid if the borrower is unable to pay, contradictory to a piggyback loan where the lender absorbs all the deficits. 
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 expense of PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, smart homeowners can get off the hook sooner than expected. Considering it can take countless years to arrive at the point where the principal is only 20% of the original amount borrowed, it's crucial to know how your home has increased in value. After all, all of the appreciation you've gained over time counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Your neighborhood may not be adhering to the national trends and/or your home could have acquired equity before things settled down, so even when nationwide trends forecast plummeting home values, you should understand that real estate is local. A certified, 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 is an appraiser's job to recognize the market dynamics of their area. At Homestead Appraisals, we're experts at pinpointing value trends in Nashville, Davidson 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 usually do away with the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
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