Have equity in your home? Want a lower payment? An appraisal from Bob Warncke Appraisal Group can help you get rid of your PMI.A 20% down payment is typically the standard when purchasing a home. The lender's risk is often only the difference between the home value and the sum remaining on the loan, so the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and typical value changes in the event a purchaser doesn't 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 handle the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower is unable to pay on the loan and the value of the home is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn't even tax deductible, PMI can be expensive to a borrower. It's profitable 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 costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer refrain from bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Wise home owners can get off the hook sooner than expected. The law guarantees that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. Since it can take many years to reach the point where the principal is just 20% of the original amount of the loan, it's essential to know how your home has grown in value. After all, any appreciation you've acquired over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home could have acquired equity before things calmed down, so even when nationwide trends indicate decreasing home values, you should realize that real estate is local. The difficult thing for almost all homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to understand the market dynamics of their area. At Bob Warncke Appraisal Group, we're experts at recognizing value trends in Tinton Falls, Monmouth 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 do away with the PMI with little anxiety. At which time, the homeowner can retain the savings from that point on.
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