Have equity in your home? Want a lower payment? An appraisal from Purdy Appraisal can help you get rid of your PMI.When getting a mortgage, a 20% down payment is usually the standard. The lender's liability is usually only the difference between the home value and the sum due on the loan, so the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and regular value variations in the event a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender endure the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower doesn't pay on the loan and the worth of the property is less than the loan balance. PMI can be pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and oftentimes isn't even tax deductible. It's lucrative for the lender because they secure the money, and they receive payment if the borrower doesn't pay, contradictory to a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a buyer prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law guarantees that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. So, smart home owners can get off the hook sooner than expected. It can take many years to get to the point where the principal is only 20% of the initial amount borrowed, so it's essential to know how your home has increased in value. After all, all of the appreciation you've gained over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Despite the fact that nationwide trends forecast falling home values, be aware that real estate is local. Your neighborhood may not be heeding the national trends and/or your home may have gained equity before things calmed down. The toughest thing for almost all home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. It is an appraiser's job to keep up with the market dynamics of their area. At Purdy Appraisal, we know when property values have risen or declined. We're experts at pinpointing value trends in Richmond, Fort Bend County and surrounding areas. When faced with data from an appraiser, the mortgage company will often drop the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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