Have equity in your home? Want a lower payment? An appraisal from The August Group Inc. can help you get rid of your PMI.A 20% down payment is usually the standard when getting a mortgage. Since the risk for the lender is generally only the difference between the home value and the sum due on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and regular value variationson the chance that a purchaser defaults. The market was working with down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower doesn't pay on the loan and the market price of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and generally isn't even tax deductible, PMI is costly to a borrower. It's beneficial for the lender because they acquire the money, and they get the money if the borrower is unable to pay, opposite from a piggyback loan where the lender absorbs all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How buyers can refrain from bearing the expense of PMIThe Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law stipulates that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, smart home owners can get off the hook a little earlier. It can take countless years to arrive at the point where the principal is only 20% of the initial amount of the loan, so it's essential to know how your home has appreciated in value. After all, all of the appreciation you've acquired over the years counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Your neighborhood may not be adhering to the national trends and/or your home might have gained equity before things simmered down, so even when nationwide trends predict falling home values, you should understand that real estate is local. The difficult thing for many home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At The August Group Inc., we know when property values have risen or declined. We're masters at recognizing value trends in St Louis, Saint Louis County and surrounding areas. When faced with figures from an appraiser, the mortgage company will often drop the PMI with little trouble. At that time, the homeowner can retain the savings from that point on.
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