Have equity in your home? Want a lower payment? An appraisal from Cedar Creek Appraisal can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. The lender's liability is usually only the difference between the home value and the sum remaining on the loan, so the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and typical value fluctuations in the event a borrower defaults. During the recent mortgage boom of the mid 2000s, it became customary to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan covers the lender in case a borrower is unable to pay on the loan and the worth of the house is lower than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender consumes all the damages, PMI is favorable for the lender because they secure the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can prevent bearing the cost of PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute home owners can get off the hook a little earlier. The law designates that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. Since it can take many years to arrive at the point where the principal is just 20% of the initial amount of the loan, it's important to know how your home has appreciated in value. After all, all of the appreciation you've accomplished over time counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends predict plummeting home values, realize that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have secured equity before things cooled off. The toughest thing for almost all homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to recognize the market dynamics of our area. At Cedar Creek Appraisal, we're masters at identifying value trends in , Washington County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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