Have equity in your home? Want a lower payment? An appraisal from Chorey & Associates can help you get rid of your PMI.A 20% down payment is typically the standard when getting a mortgage. Because the risk for the lender is oftentimes only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and typical value variationson the chance that a borrower defaults. Lenders were working with down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. This additional policy guards the lender in case a borrower doesn't pay on the loan and the value of the property is lower than what the borrower still owes on the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible. It's favorable for the lender because they collect the money, and they receive payment if the borrower defaults, different from 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 homeowners can prevent bearing the cost of PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute homeowners can get off the hook a little earlier. The law pledges that, at the request of the home owner, the PMI must be dropped when the principal amount equals just 80 percent. Because it can take many years to arrive at the point where the principal is only 20% of the original amount of the loan, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Even when nationwide trends indicate plunging home values, be aware that real estate is local. Your neighborhood may not be minding the national trends and/or your home may have secured equity before things cooled off. The hardest thing for many home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At Chorey & Associates, we're masters at identifying value trends in Suffolk, Charlottesville 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 generally eliminate the PMI with little effort. At that time, the homeowner can retain the savings from that point on.
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