EDI Appraisal can help you remove your Private Mortgage InsuranceIt's largely inferred that a 20% down payment is the standard when purchasing a home. The lender's risk is often only the remainder between the home value and the amount outstanding on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and typical value variations on the chance that a purchaser doesn't pay. During the recent mortgage boom of the last decade, it was common to see lenders taking down payments of 10, 5 or sometimes 0 percent. A lender is able to handle the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplemental plan covers the lender in case a borrower defaults on the loan and the market price of the home is lower than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible, PMI can be costly to a borrower. It's lucrative for the lender because they secure the money, and they receive payment if the borrower defaults, opposite from a piggyback loan where the lender takes in all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers prevent paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Smart homeowners can get off the hook ahead of time. The law pledges that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is just 20% of the original amount of the loan, so it's crucial to know how your home has appreciated in value. After all, every bit of appreciation you've achieved over the years counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home might have gained equity before things settled down, so even when nationwide trends forecast declining home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It's an appraiser's job to understand the market dynamics of their area. At EDI Appraisal, we know when property values have risen or declined. We're experts at identifying value trends in Fairfax Station, Fairfax County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually drop the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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