Have equity in your home? Want a lower payment? An appraisal from Doug Rives can help you get rid of your PMI.A 20% down payment is usually the standard when getting a mortgage. 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 buffer against the costs of foreclosure, reselling the home, and regular value fluctuationsin the event a purchaser is unable to pay. During the recent mortgage boom of the last decade, it became common to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower doesn't pay on the loan and the worth of the home is lower than the loan balance. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and many times isn't even tax deductible. It's lucrative for the lender because they obtain the money, and they get paid if the borrower defaults, different from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homeowners refrain from bearing the expense of PMI?The 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 original loan amount. The law designates that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, acute home owners can get off the hook sooner than expected. Since it can take many years to arrive at the point where the principal is just 20% of the initial loan amount, it's important to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood may not be minding the national trends and/or your home might have secured equity before things calmed down, so even when nationwide trends hint at declining home values, you should realize that real estate is local. 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 hard thing to know. As appraisers, it's our job to recognize the market dynamics of our area. At Doug Rives, we're masters at recognizing value trends in Austin, Travis 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 generally drop the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
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