Let Weaver Appraisal Group help you figure out if you can cancel your PMIWhen getting a mortgage, a 20% down payment is usually the standard. The lender's risk is generally only the difference between the home value and the amount outstanding on the loan, so the 20% provides a nice cushion against the expenses of foreclosure, selling the home again, and typical value changes in the event a borrower doesn't pay. Banks were accepting down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the value of the house is less than what the borrower still owes on the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. Separate from a piggyback loan where the lender takes in all the costs, PMI is lucrative for the lender because they secure 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 home buyers can avoid bearing the expense of PMIThe Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise home owners can get off the hook a little early. The law states that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. It can take many years to arrive at the point where the principal is only 20% of the initial loan amount, so it's important to know how your home has appreciated in value. After all, all of the appreciation you've gained over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be reflecting the national trends and/or your home could have gained equity before things cooled off, so even when nationwide trends predict decreasing home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Weaver Appraisal Group, we know when property values have risen or declined. We're experts at identifying value trends in Butner, Granville County and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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