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Carolina Home Appraisals can help you remove your Private Mortgage Insurance

It's typically inferred that a 20% down payment is the standard when purchasing a home. Because the risk for the lender is generally only the remainder between the home value and the sum outstanding on the loan, the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and regular value variations on the chance that a borrower doesn't pay.

Banks were taking down payments as low as 10, 5 and frequently 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower than the loan balance.

PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible. It's beneficial for the lender because they secure the money, and they get paid if the borrower is unable to pay, separate from a piggyback loan where the lender consumes all the deficits.


Did you secure your mortgage with less than 20% down? Call Carolina Home Appraisals today at 843-225-4840. You may be able to save money by removing your Private Mortgage Insurance payment.

How can a home owner refrain from bearing the cost of PMI?

As a result of The Homeowners Protection Act of 1998, lenders are forced to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount on nearly all loans. The law designates that, upon request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. So, acute home owners can get off the hook ahead of time.

Because it can take several years to arrive at the point where the principal is only 80% of the original amount of the loan, it's necessary to know how your South Carolina home has grown in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not adhere to national trends and/or your home may have gained equity before things cooled off. So even when nationwide trends forecast declining home values, you should know most importantly that real estate is local.

A certified, South Carolina licensed real estate appraiser can help homeowners figure out if their equity has exceeed the 20% point, as it's a hard thing to know. It's an appraiser's job to understand the market dynamics of their area. At Carolina Home Appraisals, we analyze value trends in Charleston 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 often eliminate the PMI with little trouble. At which time, the home owner can relish the savings from that point on.

Does your monthly house payment include a fee for PMI? Call Carolina Home Appraisals today at 843-225-4840 or send us an e-mail at info@carolinahomeappraisals.com. Documentation of your home's present value could save you thousands.