Have equity in your home? Want a lower payment? An appraisal from Castle Appraisal Service can help you get rid of your PMI.It's widely known that a 20% down payment is common when buying a house. The lender's risk is usually only the difference between the home value and the amount remaining on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, selling the home again, and regular value fluctuations on the chance that a purchaser is unable to pay. Lenders were working with down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the market price of the home is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and generally isn't even tax deductible, PMI can be pricey to a borrower. It's lucrative for the lender because they acquire the money, and they get the money if the borrower defaults, different from a piggyback loan where the lender takes in all the deficits. 
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 refrain from paying PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law states that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, keen home owners can get off the hook a little early. It can take many years to arrive at the point where the principal is only 20% of the original loan amount, so it's essential to know how your home has grown in value. After all, all of the appreciation you've acquired over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends signify decreasing home values, understand that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home might have gained equity before things simmered down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to know the market dynamics of their area. At , we're experts at pinpointing value trends in The Woodlands, Montgomery County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will most often eliminate the PMI with little effort. At which time, the home owner can delight in the savings from that point on.
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