Let CMS Appraisals Inc help you figure out if you can eliminate your PMIIt's widely inferred that a 20% down payment is accepted when purchasing a home. Because the risk for the lender is usually only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and typical value variationson the chance that a borrower is unable to pay. The market was accepting down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy takes care of the lender if a borrower is unable to pay on the loan and the market price of the property is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be pricey to a borrower. It's lucrative for the lender because they collect the money, and they receive payment if the borrower is unable to pay, unlike a piggyback loan where the lender consumes 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 keep from paying PMIWith the utilization of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Acute homeowners can get off the hook beforehand. The law guarantees that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. Considering it can take many years to reach the point where the principal is just 20% of the original loan amount, it's crucial to know how your home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends indicate falling home values, realize that real estate is local. Your neighborhood may not be minding the national trends and/or your home could have acquired equity before things cooled off. The toughest thing for almost all homeowners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At CMS Appraisals Inc, we know when property values have risen or declined. We're masters at recognizing value trends in Woodbridge, Prince William County and surrounding areas. Faced with information from an appraiser, the mortgage company will generally drop the PMI with little anxiety. At that time, the homeowner can enjoy the savings from that point on.
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