AllRight Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is typically the standard when buying a house. Since the liability for the lender is usually 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, selling the home again, and natural value changeson the chance that a borrower defaults. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender manage the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower defaults on the loan and the value of the home is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible, PMI is costly to a borrower. Contradictory to a piggyback loan where the lender absorbs all the costs, PMI is lucrative for the lender because they obtain the money, and they get paid if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Keen homeowners can get off the hook a little earlier. The law stipulates that, upon request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. Considering 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 increased in value. After all, every bit of appreciation you've achieved over time counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Despite the fact that nationwide trends indicate decreasing home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home may have gained equity before things calmed 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 tough thing to know. As appraisers, it's our job to know the market dynamics of our area. At AllRight Appraisals, we know when property values have risen or declined. We're experts at analyzing value trends in Cumming, Forsyth County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually do away with the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
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