RCA Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when purchasing a home. Since the risk for the lender is oftentimes only the remainder between the home value and the amount due on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuationsin the event a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender manage the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender if a borrower is unable to pay on the loan and the value of the house is less than what is owed on the loan. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible. It's beneficial for the lender because they acquire the money, and they get paid if the borrower defaults, separate from 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 homeowner keep from paying PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute homeowners can get off the hook a little early. The law guarantees that, upon request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. Since it can take many years to reach the point where the principal is only 20% of the original loan amount, it's important to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Even when nationwide trends indicate falling home values, be aware that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home may have gained equity before things calmed down. The difficult thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At RCA Appraisals, we know when property values have risen or declined. We're masters at recognizing value trends in Port Orange, Volusia County and surrounding areas. When faced with data from an appraiser, the mortgage company will generally remove the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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