Have equity in your home? Want a lower payment? An appraisal from Ken Rase & Co can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. Considering the liability for the lender is oftentimes only the remainder between the home value and the sum due on the loan, the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and typical value fluctuationson the chance that a borrower defaults. Lenders were accepting down payments as low as 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the value of the property is less than the balance of the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. It's lucrative for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a buyer keep from bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law designates that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, savvy home owners can get off the hook sooner than expected. Since it can take many years to get to the point where the principal is only 20% of the original amount of the loan, it's crucial to know how your home has grown in value. After all, every bit of appreciation you've achieved over the years counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Your neighborhood might not be reflecting the national trends and/or your home might have acquired equity before things cooled off, so even when nationwide trends signify plummeting home values, you should understand 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. It's an appraiser's job to keep up with the market dynamics of their area. At Ken Rase & Co, we're experts at recognizing value trends in Portsmith, Scioto 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 most often do away with the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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