McCarthy Real Estate, Inc., Appraisal Services can help you remove your Private Mortgage InsuranceWhen getting a mortgage, 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 amount outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and natural value fluctuationson the chance that a purchaser defaults. During the recent mortgage boom of the last decade, it was common to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan covers the lender if a borrower is unable to pay on the loan and the value of the home is less than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible, PMI can be costly to a borrower. It's advantageous for the lender because they collect the money, and they receive payment if the borrower defaults, opposite from a piggyback loan where the lender takes in 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 homeowners prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law promises that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, savvy homeowners can get off the hook ahead of time. Considering it can take countless years to get to the point where the principal is just 20% of the original amount of the loan, it's crucial to know how your home has increased in value. After all, all of the appreciation you've acquired over the years counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends predict decreasing home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home might have acquired equity before things calmed down. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to know the market dynamics of their area. At McCarthy Real Estate, Inc., Appraisal Services, we know when property values have risen or declined. We're experts at determining value trends in Marietta, Washington County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. At which time, the home owner can retain the savings from that point on.
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