C. Cawthon and Co., LLC can help you remove your Private Mortgage InsuranceWhen getting a mortgage, a 20% down payment is typically the standard. Because the risk for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and typical value variationson the chance that a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or even 0 percent. A lender is able to endure the increased risk of the small down payment with Private Mortgage Insurance or PMI. This added policy covers the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. It's beneficial for the lender because they acquire the money, and they receive payment if the borrower is unable to pay, different from a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can avoid paying PMIThe Homeowners Protection Act of 1998 forces the lenders on most loans 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 sooner than expected. The law promises that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is only 20% of the original loan amount, so it's important to know how your home has grown in value. After all, any appreciation you've acquired over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not be adhering to the national trends and/or your home could have gained equity before things cooled off, so even when nationwide trends indicate plummeting home values, you should realize that real estate is local. The hardest thing for most homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. It's an appraiser's job to understand the market dynamics of their area. At C. Cawthon and Co., LLC, we know when property values have risen or declined. We're experts at recognizing value trends in Lavonia, Franklin County and surrounding areas. Faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little anxiety. At that time, the homeowner can relish the savings from that point on.
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