Have equity in your home? Want a lower payment? An appraisal from Turner and Gerwitz Appraisals, LLC can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. Since the liability for the lender is usually only the difference between the home value and the amount remaining on the loan, the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and typical value changeson the chance that a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower defaults on the loan and the value of the house is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible, PMI is costly to a borrower. It's beneficial for the lender because they acquire the money, and they receive payment if the borrower defaults, unlike a piggyback loan where the lender takes in all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner prevent bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Smart homeowners can get off the hook beforehand. The law promises that, at the 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 amount borrowed, so it's crucial to know how your home has increased in value. After all, any appreciation you've obtained over the years counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends indicate plunging home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home may have secured equity before things cooled off. The hardest thing for almost all home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At Turner and Gerwitz Appraisals, LLC, we're experts at identifying value trends in Chesapeake, County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will usually cancel the PMI with little anxiety. At which time, the home owner can enjoy the savings from that point on.
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