RWA Appraisals can help you remove your Private Mortgage InsuranceIt's largely known that a 20% down payment is the standard when purchasing a home. Because the liability for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and regular value fluctuationsin the event a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or often 0 percent. A lender is able to handle the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplementary plan guards the lender if a borrower is unable to pay on the loan and the value of the home is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible, PMI is pricey to a borrower. Different from a piggyback loan where the lender absorbs all the deficits, PMI is lucrative for the lender because they acquire the money, and they get paid if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can refrain from paying PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, savvy homeowners can get off the hook a little earlier. It can take many years to reach the point where the principal is just 20% of the original amount of the loan, so it's important to know how your home has grown in value. After all, every bit of appreciation you've obtained over time counts towards abolishing PMI. So why should you pay it after your loan balance has dropped below the 80% threshold? Even when nationwide trends indicate falling home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home could have secured equity before things calmed down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At RWA Appraisals, we know when property values have risen or declined. We're masters at determining value trends in Port Orchard, Kitsap County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally do away with the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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