Have equity in your home? Want a lower payment? An appraisal from King Real Estate Services Inc. can help you get rid of your PMI.A 20% down payment is typically accepted when buying a house. The lender's liability is oftentimes only the difference between the home value and the amount due on the loan, so the 20% provides a nice cushion against the costs of foreclosure, selling the home again, and typical value variations in the event a borrower doesn't pay. During the recent mortgage boom of the mid 2000s, it was widespread to see lenders requiring down payments of 10, 5 or often 0 percent. How does a lender endure the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than the balance of the loan. PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and generally isn't even tax deductible. Opposite from a piggyback loan where the lender takes in all the costs, PMI is favorable for the lender because they obtain the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners refrain from bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law designates that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, savvy home owners can get off the hook ahead of time. It can take countless years to get to the point where the principal is only 20% of the initial 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 time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not be heeding the national trends and/or your home could have secured equity before things simmered down, so even when nationwide trends indicate declining home values, you should understand that real estate is local. The hardest thing for most homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At King Real Estate Services Inc., we know when property values have risen or declined. We're masters at recognizing value trends in Knoxville, Knox County and surrounding areas. When faced with information from an appraiser, the mortgage company will most often do away with the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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