Have equity in your home? Want a lower payment? An appraisal from R.M. Conrad & Associates, Inc. can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. Since the risk for the lender is generally only the difference between the home value and the amount due on the loan, the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and regular value variationsin the event a borrower is unable to pay. The market was taking down payments as low as 10, 5 and even 0 percent during the mortgage boom of the last decade. How does a lender handle the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added plan protects the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and many times isn't even tax deductible, PMI is pricey to a borrower. Separate from a piggyback loan where the lender consumes all the deficits, PMI is money-making for the lender because they acquire the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Smart homeowners can get off the hook beforehand. The law promises that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is just 20% of the initial loan amount, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood might not be adhering to the national trends and/or your home could have gained equity before things calmed down, so even when nationwide trends predict plunging home values, you should realize that real estate is local. The toughest thing for almost all home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to recognize the market dynamics of their area. At R.M. Conrad & Associates, Inc., we know when property values have risen or declined. We're experts at pinpointing value trends in West Chester, Chester County and surrounding areas. When faced with information from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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