Have equity in your home? Want a lower payment? An appraisal from Premier Appraisal of SoCal can help you get rid of your PMI.It's widely inferred that a 20% down payment is the standard when buying a house. Considering the liability for the lender is often only the difference between the home value and the sum outstanding on the loan, the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and regular value variationsin the event a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the minimal down payment with Private Mortgage Insurance or PMI. This supplemental plan takes care of the lender in the event a borrower defaults on the loan and the value of the property is lower than the loan balance. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and many times isn't even tax deductible, PMI can be pricey to a borrower. It's favorable for the lender because they obtain the money, and they get the money if the borrower defaults, separate from a piggyback loan where the lender consumes all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Wise home owners can get off the hook ahead of time. The law guarantees that, upon request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. Because it can take many years to arrive at the point where the principal is just 20% of the initial amount borrowed, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've achieved over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home may have secured equity before things calmed down, so even when nationwide trends indicate falling home values, you should understand that real estate is local. The toughest thing for almost all home owners to know is just when their home's equity rises above 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 Premier Appraisal of SoCal, we know when property values have risen or declined. We're masters at analyzing value trends in Mission Viejo, Orange County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At which time, the homeowner can enjoy the savings from that point on.
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