Have equity in your home? Want a lower payment? An appraisal from Smithworks LLC can help you get rid of your PMI.When buying a house, a 20% down payment is typically the standard. The lender's liability is usually only the difference between the home value and the sum outstanding on the loan, so the 20% provides a nice cushion against the expenses of foreclosure, selling the home again, and typical value changes on the chance that a purchaser is unable to pay. Lenders were taking down payments down to 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 solution is Private Mortgage Insurance or PMI. This added plan takes care of the lender in the event a borrower doesn't pay on the loan and the value of the home is less than the balance of the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and often isn't even tax deductible. It's favorable for the lender because they secure the money, and they get paid if the borrower defaults, separate from a piggyback loan where the lender takes in all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners avoid bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Keen home owners can get off the hook ahead of time. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take countless years to get to the point where the principal is only 20% of the original amount of the loan, so it's necessary to know how your home has grown in value. After all, any appreciation you've acquired over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends indicate decreasing home values, be aware that real estate is local. Your neighborhood might not be following the national trends and/or your home could have acquired equity before things simmered down. The toughest thing for many homeowners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. It's an appraiser's job to keep up with the market dynamics of their area. At Smithworks LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Burke, Fairfax County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually drop the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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