Have equity in your home? Want a lower payment? An appraisal from R Rick Goodwin can help you get rid of your PMI.A 20% down payment is typically the standard when getting a mortgage. Since the liability for the lender is usually only the difference between the home value and the amount outstanding on the loan, the 20% provides a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuationson the chance that a borrower doesn't pay. The market was taking down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to endure the increased risk of the small down payment with Private Mortgage Insurance or PMI. This supplemental policy takes care of the lender in the event a borrower is unable to pay on the loan and the value of the property is less than what the borrower still owes on the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible. It's profitable for the lender because they acquire the money, and they get the money if the borrower doesn't pay, different from 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 home owners prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law guarantees that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, keen home owners can get off the hook a little early. Because it can take many years to reach the point where the principal is only 20% of the original loan amount, it's crucial to know how your home has grown in value. After all, every bit of appreciation you've obtained over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not be following the national trends and/or your home may have gained equity before things cooled off, so even when nationwide trends predict plunging home values, you should realize that real estate is local. The toughest thing for most home owners 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 keep up with the market dynamics of our area. At R Rick Goodwin, we know when property values have risen or declined. We're experts at identifying value trends in East Dennis, Barnstable County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally eliminate the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.
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