Capraro Appraisal Company, Inc. can help you remove your Private Mortgage Insurance

When getting a mortgage, a 20% down payment is typically the standard. Because the risk for the lender is usually only the difference between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and typical value fluctuations in the event a purchaser is unable to pay.

Lenders were accepting down payments dropping to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. A lender is able to manage the added risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary policy covers the lender in the event a borrower doesn't pay on the loan and the value of the property is lower than the loan balance.

PMI is pricey to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. It's beneficial for the lender because they acquire the money, and they are covered if the borrower defaults, separate from a piggyback loan where the lender absorbs all the damages.


Did you have less than 20% to put down on your mortgage? Contact Capraro Appraisal Company, Inc. today at (401) 353-5500 to see if you can get rid of your Private Mortgage Insurance premium.

How can home owners avoid bearing the expense of PMI?

With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount on nearly all loans. The law designates that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, keen home owners can get off the hook sooner than expected.

It can take a significant number of years to get to the point where the principal is just 80% of the initial amount of the loan, so it's necessary to know how your Rhode Island home has grown in value. After all, every bit of appreciation you've accomplished over the years counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not follow national trends and/or your home might have secured equity before things cooled off. So even when nationwide trends signify decreasing home values, you should realize that real estate is local.

The toughest thing for almost all homeowners to figure out is whether their home equity has exceeded 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 know when property values have risen or declined. We're masters at identifying value trends in North Providence, Providence County, and surrounding areas. Faced with figures from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.


Is PMI a part of your monthly mortgage payment? Call Capraro Appraisal Company, Inc. today at (401) 353-5500 or send us an e-mail. Documentation of your home's present value could save you thousands.

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