Have equity in your home? Want a lower payment? An appraisal from Lewis Appraisals can help you get rid of your PMI.A 20% down payment is usually the standard when purchasing a home. The lender's liability is often only the difference between the home value and the amount due on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, selling the home again, and regular value variations on the chance that a borrower defaults. Banks were taking down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplemental policy guards the lender in case a borrower is unable to pay on the loan and the value of the home is lower than what is owed on the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible. Unlike a piggyback loan where the lender absorbs all the deficits, PMI is beneficial for the lender because they obtain the money, and they get the money 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 home buyers prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law designates that, at the request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. So, wise homeowners can get off the hook ahead of time. It can take many years to reach the point where the principal is only 20% of the initial amount borrowed, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've gained over time counts towards abolishing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Your neighborhood may not be following the national trends and/or your home could have acquired equity before things settled down, so even when nationwide trends predict declining home values, you should understand that real estate is local. The difficult thing for many home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. It's an appraiser's job to know the market dynamics of their area. At Lewis Appraisals, we're experts at determining value trends in Coshocton, Coshocton County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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