Let Lisa Davis Appraisals help you figure out if you can get rid of your PMIIt's widely known that a 20% down payment is the standard when purchasing a home. The lender's liability is generally only the remainder between the home value and the amount outstanding on the loan, so the 20% provides a nice buffer against the charges of foreclosure, selling the home again, and natural value changes in the event a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower doesn't pay on the loan and the market price of the home is lower than the balance of the loan. PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible. Different from a piggyback loan where the lender takes in all the losses, PMI is money-making for the lender because they acquire 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 homebuyers can refrain from bearing the expense of PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, keen homeowners can get off the hook a little early. It can take countless years to get to the point where the principal is only 20% of the initial amount of the loan, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over the years counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends predict plummeting home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home may have secured equity before things simmered down. The hardest thing for many homeowners 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 Lisa Davis Appraisals, we know when property values have risen or declined. We're experts at identifying value trends in Louisville, Jefferson County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often do away with the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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