Have equity in your home? Want a lower payment? An appraisal from Lynch Appraisals can help you get rid of your PMI.It's widely known that a 20% down payment is accepted when getting a mortgage. Considering the liability for the lender is generally only the difference between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the costs of foreclosure, reselling the home, and typical value changeson the chance that a purchaser defaults. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender handle the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplemental policy covers the lender in case a borrower defaults on the loan and the market price of the property is less than what is owed on the loan. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible. Unlike a piggyback loan where the lender consumes all the deficits, PMI is money-making for the lender because they obtain the money, and they get the money 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 home buyers can avoid paying PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, keen home owners can get off the hook a little early. It can take countless years to get to the point where the principal is just 20% of the initial amount borrowed, so it's crucial to know how your home has increased in value. After all, all of the appreciation you've obtained over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home could have gained equity before things simmered down, so even when nationwide trends predict plummeting home values, you should realize that real estate is local. The hardest thing for most home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It is an appraiser's job to recognize the market dynamics of their area. At Lynch Appraisals, we know when property values have risen or declined. We're masters at identifying value trends in Estill Springs, Franklin County and surrounding areas. When faced with data from an appraiser, the mortgage company will often do away with the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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