Have equity in your home? Want a lower payment? An appraisal from can help you get rid of your PMI.A 20% down payment is usually accepted when purchasing a home. The lender's risk is oftentimes only the remainder between the home value and the sum remaining on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and regular value variations in the event a borrower is unable to pay. During the recent mortgage upturn of the last decade, it was common to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower is unable to pay on the loan and the worth of the house is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible, PMI can be expensive to a borrower. Contradictory to a piggyback loan where the lender consumes all the deficits, PMI is advantageous for the lender because they obtain 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 can a home owner avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute homeowners can get off the hook a little early. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. Because it can take countless years to reach the point where the principal is only 20% of the initial amount of the loan, it's crucial to know how your home has grown in value. After all, every bit of appreciation you've gained over time counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Your neighborhood may not be following the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends predict falling home values, you should understand that real estate is local. 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 difficult thing to know. It's an appraiser's job to understand the market dynamics of their area. At , we're experts at pinpointing value trends in , Baltimore County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At that time, the homeowner can retain the savings from that point on.
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