Have equity in your home? Want a lower payment? An appraisal from South Shore Realty Advisors, Inc can help you get rid of your PMI.

A 20% down payment is typically accepted when buying a house. Since the risk for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and typical value variationson the chance that a borrower defaults.

The market was working with down payments down to 10, 5 and even 0 percent during the mortgage boom of the last decade. A lender is able to manage the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the value of the property 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 generally isn't even tax deductible. Contradictory to a piggyback loan where the lender takes in all the costs, PMI is money-making for the lender because they obtain the money, and they receive payment if the borrower is unable to pay.

Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI.

How can buyers refrain from bearing the cost of PMI?

With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Acute homeowners can get off the hook a little earlier. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent.

Considering it can take countless years to arrive at the point where the principal is only 20% of the original loan amount, it's essential to know how your home has grown in value. After all, every bit of appreciation you've acquired 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% mark? Your neighborhood may not be adhering to the national trends and/or your home may have acquired equity before things calmed down, so even when nationwide trends predict declining home values, you should understand that real estate is local.

The difficult thing for most home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to keep up with the market dynamics of their area. At South Shore Realty Advisors, Inc, we know when property values have risen or declined. We're experts at recognizing value trends in Marshfield, Plymouth County and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At which time, the homeowner can relish the savings from that point on.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:
Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year