Have equity in your home? Want a lower payment? An appraisal from Capstone Appraisals can help you get rid of your PMI.A 20% down payment is usually the standard when getting a mortgage. Since the risk for the lender is usually only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice buffer against the charges of foreclosure, reselling the home, and typical value variations on the chance that a borrower doesn't pay. During the recent mortgage boom of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender in the event a borrower is unable to pay on the loan and the value of the property is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender absorbs all the damages, PMI is beneficial for the lender because they acquire the money, and they get the money if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers refrain from paying PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law pledges that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, acute homeowners can get off the hook sooner than expected. It can take countless years to get to the point where the principal is just 20% of the initial loan amount, so it's essential to know how your home has appreciated in value. After all, all of the appreciation you've accomplished over the years 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 acquired equity before things calmed down, so even when nationwide trends forecast declining home values, you should understand that real estate is local. The toughest thing for most home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Capstone Appraisals LLC, we're masters at determining value trends in Tyler, Smith County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will most often drop the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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