The Welter Appraisal Group can help you remove your Private Mortgage InsuranceIt's typically known that a 20% down payment is accepted when getting a mortgage. Considering the liability for the lender is usually only the difference between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the expenses of foreclosure, reselling the home, and regular value variationsin the event a borrower is unable to pay. Lenders were taking down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy protects the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than the balance of 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 frequently isn't even tax deductible. It's beneficial for the lender because they collect the money, and they get paid if the borrower doesn't pay, unlike a piggyback loan where the lender consumes 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 homebuyers avoid paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise homeowners can get off the hook sooner than expected. The law designates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. Because it can take countless years to get to the point where the principal is just 20% of the original loan amount, it's necessary to know how your home has increased in value. After all, any appreciation you've acquired over time counts towards removing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things settled down, so even when nationwide trends indicate plummeting home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. As appraisers, it's our job to understand the market dynamics of our area. At The Welter Appraisal Group, we're experts at analyzing value trends in Oakhurst, Monmouth County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often drop the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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