Damon L. Smith Appraisal Company can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is typically the standard. Since the risk for the lender is often only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and regular value fluctuationsin the event a purchaser defaults. Banks were taking down payments down to 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender endure the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy guards the lender in the event a borrower defaults on the loan and the value of the house is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be costly to a borrower. It's beneficial for the lender because they collect the money, and they receive payment if the borrower defaults, separate from a piggyback loan where the lender absorbs all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers keep from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law designates that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, wise homeowners can get off the hook a little early. It can take many years to arrive at the point where the principal is just 20% of the initial amount of the loan, so it's essential to know how your home has appreciated in value. After all, all of the appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Even when nationwide trends signify plunging home values, realize that real estate is local. Your neighborhood may not be following the national trends and/or your home might have secured equity before things settled down. The toughest thing for most homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Damon L. Smith Appraisal Company, we're experts at determining value trends in Savannah, Chatham County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will most often cancel the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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