Have equity in your home? Want a lower payment? An appraisal from L.B. Brainard and Associates can help you get rid of your PMI.When buying a house, a 20% down payment is usually the standard. The lender's risk is usually only the difference between the home value and the sum remaining on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and typical value changes on the chance that a purchaser defaults. During the recent mortgage boom of the mid 2000s, it was customary to see lenders taking down payments of 10, 5 or often 0 percent. A lender is able to handle the additional risk of the low down payment with Private Mortgage Insurance or PMI. This added plan protects the lender if a borrower defaults on the loan and the value of the home is less than the loan balance. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and frequently isn't even tax deductible. It's profitable for the lender because they secure the money, and they receive payment if the borrower defaults, unlike 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 buyers can keep from paying PMIWith the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law guarantees that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, acute homeowners can get off the hook a little early. Since it can take many years to reach the point where the principal is only 20% of the initial loan amount, it's crucial to know how your home has increased in value. After all, every bit of appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Despite the fact that nationwide trends indicate plunging home values, realize that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home may have gained equity before things calmed down. The difficult thing for many homeowners to know is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. It is an appraiser's job to know the market dynamics of their area. At L.B. Brainard and Associates, we're masters at recognizing value trends in Colchester, New London County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will generally remove the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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