Have equity in your home? Want a lower payment? An appraisal from Joe Murphy Appraisals can help you get rid of your PMI.When buying a house, a 20% down payment is usually the standard. The lender's liability is often only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and natural value variations in the event a purchaser is unable to pay. The market was accepting down payments down to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This additional plan takes care of the lender in the event a borrower doesn't pay on the loan and the value of the property is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. Unlike a piggyback loan where the lender takes in all the damages, PMI is advantageous for the lender because they acquire the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a buyer avoid paying PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Savvy homeowners can get off the hook a little early. The law guarantees that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. It can take many years to get to the point where the principal is only 20% of the original loan amount, so it's necessary to know how your home has increased in value. After all, any appreciation you've obtained over time counts towards dismissing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be following the national trends and/or your home might have acquired equity before things cooled off, so even when nationwide trends indicate declining home values, you should realize that real estate is local. 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 difficult thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Joe Murphy Appraisals, we know when property values have risen or declined. We're experts at pinpointing value trends in Gamaliel, Monroe County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally remove the PMI with little trouble. At that time, the home owner can delight in the savings from that point on.
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