Let All Residential Appraisal help you determine if you can eliminate your PMIIt's generally inferred that a 20% down payment is the standard when getting a mortgage. Because the liability for the lender is oftentimes only the remainder between the home value and the amount remaining on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and typical value variationsin the event a purchaser is unable to pay. During the recent mortgage boom of the last decade, it became common to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender manage the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower is unable to pay on the loan and the value of the property is lower than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and often isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender takes in all the costs, PMI is lucrative for the lender because they acquire the money, and they receive payment if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home owners can avoid bearing the cost of PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cease the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Wise homeowners can get off the hook sooner than expected. The law stipulates that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. It can take many years to reach the point where the principal is only 20% of the initial amount of the loan, so it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've obtained over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends predict falling home values, realize that real estate is local. Your neighborhood might not be adopting the national trends and/or your home could have gained equity before things calmed down. The difficult 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 surely help. As appraisers, it's our job to understand the market dynamics of our area. At All Residential Appraisal, we know when property values have risen or declined. We're experts at pinpointing value trends in Whittier, Los Angeles County and surrounding areas. When faced with figures from an appraiser, the mortgage company will most often drop the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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