Have equity in your home? Want a lower payment? An appraisal from Fetterman Appraisal Company can help you get rid of your PMI.A 20% down payment is usually accepted when buying a house. The lender's risk is oftentimes only the difference between the home value and the amount due on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and regular value variations on the chance that a borrower defaults. The market was working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy protects the lender in case a borrower is unable to pay on the loan and the market price of the house is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible, PMI is pricey to a borrower. It's lucrative for the lender because they secure the money, and they receive payment if the borrower doesn't pay, unlike a piggyback loan where the lender consumes 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 a homeowner refrain from bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Acute homeowners can get off the hook beforehand. The law designates that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. Because it can take many years to reach the point where the principal is just 20% of the initial loan amount, it's important to know how your home has increased in value. After all, all of the appreciation you've obtained over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends signify plunging home values, understand that real estate is local. Your neighborhood may not be following the national trends and/or your home could have secured equity before things settled down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to understand the market dynamics of their area. At Fetterman Appraisal Company, we know when property values have risen or declined. We're experts at determining value trends in Richmond, Goochland County and surrounding areas. Faced with data from an appraiser, the mortgage company will generally do away with the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
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