Columbus Appraisal Company, LLC can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. The lender's risk is generally only the remainder between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and typical value fluctuations on the chance that a purchaser is unable to pay. Banks were taking down payments as low as 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender in case a borrower is unable to pay on the loan and the value of the property is lower than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be costly to a borrower. Unlike a piggyback loan where the lender takes in all the deficits, PMI is lucrative for the lender because they obtain the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can refrain from bearing the expense of PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law stipulates that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, smart homeowners can get off the hook a little early. Considering it can take countless years to get to the point where the principal is only 20% of the original loan amount, it's important 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 should you pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not be adopting the national trends and/or your home may have acquired equity before things settled down, so even when nationwide trends forecast decreasing 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 rises above 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 Columbus Appraisal Company, LLC, we're masters at identifying value trends in Columbus, Franklin 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 often remove the PMI with little trouble. At that time, the homeowner can retain the savings from that point on.
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