Have equity in your home? Want a lower payment? An appraisal from Kimberly Smith & Associates can help you get rid of your PMI.A 20% down payment is usually accepted when buying a house. Considering the risk for the lender is generally only the remainder between the home value and the sum outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and regular value changeson the chance that a purchaser is unable to pay. The market was working with 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 added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower doesn't pay on the loan and the worth of the house is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible, PMI is costly to a borrower. It's favorable for the lender because they secure the money, and they get paid if the borrower doesn't pay, 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 a home owner avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Smart homeowners can get off the hook sooner than expected. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. Since it can take many years to arrive at the point where the principal is only 20% of the original amount borrowed, it's essential to know how your home has grown in value. After all, every bit of appreciation you've achieved over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Your neighborhood might not be minding the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends indicate decreasing 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 difficult thing to know. It's an appraiser's job to know the market dynamics of their area. At Kimberly Smith & Associates, Inc, we're masters at recognizing value trends in Virginia Beach, Virginia Beach City County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually remove the PMI with little effort. At that time, the home owner can delight in the savings from that point on.
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