Have equity in your home? Want a lower payment? An appraisal from Capraro Appraisal Company, Inc. can help you get rid of your PMI.

It's generally inferred that a 20% down payment is accepted when purchasing a home. Considering the liability for the lender is oftentimes only the remainder between the home value and the amount remaining on the loan, the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and typical value changes in the event a borrower doesn't pay.

During the recent mortgage upturn of the last decade, it was widespread to see lenders only asking for down payments of 10, 5, 3 or often 0 percent. How does a lender manage the additional risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower doesn't pay on the loan and the value of the home is lower than the loan balance.

PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible. As opposed to a piggyback loan where the lender absorbs all the deficits, PMI is lucrative for the lender because they secure the money, and they get the money if the borrower is unable to pay.


The savings from dropping the PMI required when you got your mortgage will make up for the price of the appraisal in no time. Capraro Appraisal Company, Inc. has years of experience with value trends in the city of North Providence and Providence County. Contact us today.

How can a buyer keep from bearing the cost of PMI?

With the implementation 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 original loan amount on most loans. Acute homeowners can get off the hook ahead of time. The law pledges that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent.

Since it can take a significant number of years to arrive at the point where the principal is only 80% of the initial amount borrowed, it's essential to know how your Rhode Island home has grown in value. After all, any appreciation you've acquired over time counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not conform to national trends and/or your home may have secured equity before things cooled off. So even when nationwide trends indicate a reduction in home values, you should realize that real estate is local.

The difficult thing for almost all people to determine is just when their home's equity goes over the 20% point. A certified, Rhode Island licensed real estate appraiser can definitely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Capraro Appraisal Company, Inc., we're masters at recognizing value trends in North Providence, Providence County, and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.


Did you secure your mortgage with less than 20% down? Contact Capraro Appraisal Company, Inc. today at (401) 353-5500 to see if you can save money by removing your Private Mortgage Insurance premium.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year