Mark Schofield Appraisal Services can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is typically the standard. Since the risk for the lender is usually only the remainder between the home value and the amount outstanding on the loan, the 20% provides a nice buffer against the costs of foreclosure, reselling the home, and typical value variationsin the event a borrower defaults. The market was taking down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added policy guards the lender in the event a borrower defaults on the loan and the worth of the home is lower than the balance of the loan. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and oftentimes isn't even tax deductible. It's advantageous for the lender because they acquire the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner avoid bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law states that, at the request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, smart homeowners can get off the hook a little early. It can take countless years to get to the point where the principal is only 20% of the original loan amount, so it's crucial to know how your home has increased in value. After all, every bit of appreciation you've gained over the years counts towards removing PMI. So why should you pay it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends hint at plunging home values, realize that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have acquired equity before things calmed down. The difficult thing for many homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. It's an appraiser's job to understand the market dynamics of their area. At Mark Schofield Appraisal Services , we know when property values have risen or declined. We're experts at identifying value trends in St Johns, Saint Johns County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At that time, the homeowner can enjoy the savings from that point on.
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