RWA Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is typically the standard when getting a mortgage. The lender's liability is generally only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and regular value fluctuations in the event a purchaser defaults. The market was taking down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This added plan protects the lender in the event a borrower defaults on the loan and the value of the house is less than the balance of the loan. PMI can be costly to a borrower in that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally isn't even tax deductible. It's money-making for the lender because they acquire the money, and they get paid if the borrower is unable to pay, contradictory to a piggyback loan where the lender takes in 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 a buyer keep from paying PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law stipulates that, upon request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. So, keen homeowners can get off the hook a little early. Considering it can take many years to reach the point where the principal is just 20% of the initial loan amount, it's essential to know how your home has increased in value. After all, any appreciation you've gained over time counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Your neighborhood might not be reflecting the national trends and/or your home might have secured equity before things simmered down, so even when nationwide trends forecast declining home values, you should realize that real estate is local. The hardest thing for many homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. 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. When faced with figures from an appraiser, the mortgage company will often 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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