Have equity in your home? Want a lower payment? An appraisal from McCormick Co. can help you get rid of your PMI.It's generally inferred that a 20% down payment is accepted when buying a house. The lender's risk 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, reselling the home, and typical value fluctuations in the event a purchaser defaults. The market was accepting down payments down to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This additional policy takes care of the lender in case a borrower doesn't pay on the loan and the market price of the property is less than the loan balance. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible. It's lucrative for the lender because they obtain the money, and they receive payment if the borrower doesn't pay, separate from a piggyback loan where the lender takes in all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers refrain from paying PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law stipulates that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, smart home owners can get off the hook a little earlier. Because it can take countless years to reach the point where the principal is just 20% of the original amount of the loan, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've gained over the years counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not be following the national trends and/or your home might have secured equity before things settled down, so even when nationwide trends forecast falling home values, you should understand that real estate is local. The hardest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to understand the market dynamics of their area. At McCormick Co., we know when property values have risen or declined. We're masters at identifying value trends in Stephens City, Frederick County and surrounding areas. Faced with figures from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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