Bernard Valuation Services can help you remove your Private Mortgage InsuranceWhen getting a mortgage, a 20% down payment is typically the standard. The lender's risk is oftentimes only the remainder between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, reselling the home, and typical value fluctuations in the event a purchaser defaults. During the recent mortgage boom of the last decade, it became widespread to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower is unable to pay on the loan and the market price of the home is less than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and generally isn't even tax deductible, PMI is pricey to a borrower. It's advantageous for the lender because they obtain the money, and they receive payment if the borrower defaults, contradictory to a piggyback loan where the lender absorbs 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 a home owner refrain from bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Savvy homeowners can get off the hook ahead of time. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take many years to reach the point where the principal is only 20% of the original loan amount, so it's important to know how your home has increased in value. After all, every bit of appreciation you've acquired over the years counts towards dismissing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends hint at declining home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have acquired equity before things calmed down. The hardest thing for most home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. It's an appraiser's job to keep up with the market dynamics of their area. At Bernard Valuation Services, we're masters at pinpointing value trends in Charlotte, Mecklenburg County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will usually drop the PMI with little trouble. At which time, the homeowner can retain the savings from that point on.
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