Have equity in your home? Want a lower payment? An appraisal from Viviree Scotton can help you get rid of your PMI.When getting a mortgage, a 20% down payment is usually the standard. The lender's risk is generally only the difference between the home value and the amount due on the loan, so the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and natural value changes in the event a purchaser defaults. Banks were taking down payments down to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender handle the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower defaults on the loan and the value of the home is lower than the loan balance. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. It's lucrative for the lender because they secure the money, and they receive payment if the borrower doesn't pay, different from a piggyback loan where the lender takes in 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 homeowner prevent paying PMI?With the employment 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 reaches 78 percent of the initial loan amount. Savvy home owners can get off the hook ahead of time. The law promises that, at the request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is just 20% of the original amount borrowed, so it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends indicate declining home values, understand that real estate is local. Your neighborhood may not be adopting the national trends and/or your home might have gained equity before things settled down. The hardest thing for almost all 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. As appraisers, it's our job to keep up with the market dynamics of our area. At Viviree Scotton, we know when property values have risen or declined. We're experts at recognizing value trends in Chapel Hill, Durham County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually drop the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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