Let J. GRAHAM GAULT REAL ESTATE APPRAISER & CONSULTANT help you determine if you can get rid of your PMIWhen buying a house, a 20% down payment is usually the standard. Because the risk for the lender is usually only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and natural value changesin the event a borrower doesn't pay. During the recent mortgage boom of the mid 2000s, it became widespread to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower doesn't pay on the loan and the worth of the house is less than what is owed on the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible. It's favorable for the lender because they secure the money, and they get paid if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the deficits. 
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 PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Keen homeowners can get off the hook ahead of time. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. It can take countless years to reach the point where the principal is only 20% of the initial amount of the loan, so it's essential to know how your home has increased in value. After all, all of the appreciation you've acquired over the years counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends indicate plunging home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home could have secured equity before things simmered down. The toughest thing for almost all homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. As appraisers, it's our job to keep up with the market dynamics of our area. At J. GRAHAM GAULT REAL ESTATE APPRAISER & CONSULTANT, we're experts at determining value trends in Monroe, Ouachita 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 often do away with the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
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