RWA Appraisals can help you remove your Private Mortgage InsuranceIt's widely understood that a 20% down payment is accepted when buying a house. The lender's risk is often only the difference between the home value and the amount remaining on the loan, so the 20% adds a nice buffer against the charges of foreclosure, reselling the home, and regular value fluctuations in the event a purchaser defaults. During the recent mortgage boom of the mid 2000s, it was customary to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower doesn't pay on the loan and the worth of the home is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible, PMI is pricey to a borrower. Opposite from a piggyback loan where the lender consumes all the damages, PMI is favorable for the lender because they secure the money, and they receive payment 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 buyers can avoid bearing the cost of PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Acute home owners can get off the hook a little early. The law guarantees that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take many years to get to the point where the principal is just 20% of the original amount borrowed, so it's important to know how your home has appreciated in value. After all, any appreciation you've achieved over the years counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends forecast decreasing home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home may have gained equity before things calmed down. An accredited, 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 recognize the market dynamics of their area. At RWA Appraisals, we know when property values have risen or declined. We're experts at identifying value trends in Port Orchard, Kitsap County and surrounding areas. When faced with information from an appraiser, the mortgage company will often do away with the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
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