RJR Appraisals can help you remove your Private Mortgage InsuranceWhen purchasing a home, a 20% down payment is usually the standard. The lender's liability is generally only the remainder between the home value and the amount due on the loan, so the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and typical value fluctuations on the chance that a purchaser defaults. During the recent mortgage boom of the mid 2000s, it was widespread to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added policy takes care of the lender if a borrower is unable to pay on the loan and the worth of the home is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI is pricey to a borrower. Opposite from a piggyback loan where the lender takes in all the losses, PMI is favorable for the lender because they collect the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner avoid paying PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Wise home owners can get off the hook sooner than expected. The law designates that, at the request of the home owner, the PMI must be released when the principal amount equals just 80 percent. It can take countless years to get to the point where the principal is just 20% of the initial amount of the loan, so it's crucial to know how your home has increased in value. After all, every bit of appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be heeding the national trends and/or your home could have gained equity before things simmered down, so even when nationwide trends forecast falling home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It's an appraiser's job to know the market dynamics of their area. At RJR Appraisals, we know when property values have risen or declined. We're masters at recognizing value trends in Garner, Johnston County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often drop the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
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