Have equity in your home? Want a lower payment? An appraisal from Red River Residential Appraisals can help you get rid of your PMI.A 20% down payment is typically accepted when getting a mortgage. The lender's risk is generally only the remainder between the home value and the sum outstanding on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and typical value fluctuations on the chance that a borrower defaults. Banks were working with down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. This additional plan takes care of the lender in case a borrower doesn't pay on the loan and the market price of the home is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible, PMI is costly to a borrower. It's lucrative for the lender because they obtain the money, and they receive payment if the borrower defaults, different from a piggyback loan where the lender takes in all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can keep from paying PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, savvy homeowners can get off the hook sooner than expected. It can take many years to reach the point where the principal is just 20% of the initial amount of the loan, so it's important to know how your home has appreciated in value. After all, any appreciation you've gained over the years counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends indicate falling home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have gained equity before things calmed down. A certified, 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 know the market dynamics of our area. At Red River Residential Appraisals, we're experts at identifying value trends in Portland, Sumner County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will usually eliminate the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.
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