Have equity in your home? Want a lower payment? An appraisal from South Shore Realty Advisors, Inc can help you get rid of your PMI.It's typically known that a 20% down payment is accepted when purchasing a home. Since the risk for the lender is oftentimes only the remainder between the home value and the sum outstanding on the loan, the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and typical value fluctuationsin the event a purchaser defaults. During the recent mortgage boom of the mid 2000s, it was common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender endure the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This added policy guards the lender in the event a borrower is unable to pay on the loan and the worth of the home is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible, PMI can be expensive to a borrower. It's lucrative for the lender because they obtain the money, and they get the money if the borrower is unable to pay, opposite from a piggyback loan where the lender consumes 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 homebuyers avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law promises that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, smart homeowners can get off the hook a little earlier. Considering it can take many years to get to the point where the principal is just 20% of the original loan amount, it's important to know how your home has grown in value. After all, every bit of appreciation you've acquired over time counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends indicate plunging home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home may have secured equity before things cooled off. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It's an appraiser's job to understand the market dynamics of their area. At South Shore Realty Advisors, Inc, we're masters at analyzing value trends in Marshfield, Plymouth 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 generally cancel the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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