Have equity in your home? Want a lower payment? An appraisal from Purdy Appraisal can help you get rid of your PMI.A 20% down payment is usually the standard when getting a mortgage. Because the liability for the lender is generally only the difference between the home value and the amount remaining on the loan, the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and regular value variationson the chance that a borrower defaults. During the recent mortgage boom of the mid 2000s, it was widespread to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This additional policy guards the lender in the event a borrower doesn't pay on the loan and the worth of the property is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible, PMI can be expensive to a borrower. Opposite from a piggyback loan where the lender absorbs all the losses, PMI is profitable for the lender because they obtain 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 home buyer avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise homeowners can get off the hook ahead of time. The law guarantees that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the original amount borrowed, so it's important to know how your home has appreciated in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be reflecting the national trends and/or your home may have gained equity before things simmered down, so even when nationwide trends predict plummeting home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Purdy Appraisal, we're masters at recognizing value trends in Richmond, Fort Bend County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will often remove the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.
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