Oxford Home Valuations can help you remove your Private Mortgage InsuranceIt's typically understood that a 20% down payment is common when getting a mortgage. Since the risk for the lender is usually only the difference between the home value and the amount due on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and natural value changesin the event a borrower defaults. Lenders were accepting down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added policy covers the lender in case a borrower is unable to pay on the loan and the market price of the property is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and generally 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 defaults, different from a piggyback loan where the lender absorbs 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 buyers keep from bearing the expense of PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Wise homeowners can get off the hook a little early. The law stipulates 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 arrive at the point where the principal is just 20% of the initial loan amount, so it's important to know how your home has increased in value. After all, any appreciation you've gained over the years counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be minding the national trends and/or your home might have secured equity before things cooled off, so even when nationwide trends signify falling home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. It's an appraiser's job to keep up with the market dynamics of their area. At Oxford Home Valuations, we're masters at determining value trends in Asheville, Buncombe County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often cancel the PMI with little effort. At that time, the home owner can enjoy the savings from that point on.
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