Have equity in your home? Want a lower payment? An appraisal from Edwards Appraisal Service, Inc. can help you get rid of your PMI.It's widely known that a 20% down payment is common when purchasing a home. Because the risk for the lender is generally only the difference between the home value and the amount remaining on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and typical value changesin the event a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender endure the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This additional plan guards the lender in the event a borrower defaults on the loan and the value of the home is less than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible, PMI can be pricey to a borrower. It's profitable for the lender because they obtain the money, and they get paid if the borrower defaults, unlike a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can refrain from paying PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Smart homeowners can get off the hook a little early. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. It can take many years to get to the point where the principal is only 20% of the original loan amount, so it's necessary to know how your home has appreciated in value. After all, all of the 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% threshold? Even when nationwide trends predict plummeting home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home could have acquired equity before things simmered down. 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. It's an appraiser's job to keep up with the market dynamics of their area. At Edwards Appraisal Service, Inc., we're masters at pinpointing value trends in Goldsboro, Wayne County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will most often drop the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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