Let Whicker Appraisals Inc. help you determine if you can eliminate your PMIWhen buying a house, a 20% down payment is usually the standard. The lender's risk is usually only the remainder between the home value and the amount outstanding on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and typical value changes in the event a borrower defaults. During the recent mortgage boom of the last decade, it was widespread to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower doesn't pay on the loan and the value of the home is lower than what is owed on the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often 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, opposite from 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 can buyers refrain from bearing the expense of PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Wise homeowners can get off the hook beforehand. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount equals 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 crucial to know how your home has appreciated in value. After all, any appreciation you've accomplished over the years counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends signify decreasing home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home could have acquired equity before things cooled off. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to recognize the market dynamics of their area. At Whicker Appraisals Inc., we're experts at recognizing value trends in Knoxville, Knox County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little effort. At which time, the homeowner can relish the savings from that point on.
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