Let Peterson Appraisal Group help you decide if you can get rid of your PMIA 20% down payment is usually the standard when buying a house. Because the risk for the lender is often only the remainder between the home value and the sum due on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and typical value fluctuationsin the event a borrower is unable to pay. During the recent mortgage boom of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI protects the lender if a borrower defaults on the loan and the worth of the house is less than what the borrower still owes on the loan. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible. It's profitable for the lender because they obtain the money, and they receive payment if the borrower doesn't pay, contradictory to a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can keep from bearing the expense of PMIThe Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Keen homeowners can get off the hook ahead of time. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. Considering it can take countless years to get to the point where the principal is just 20% of the original loan amount, it's important to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over the years counts towards abolishing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home may have gained equity before things settled down, so even when nationwide trends predict decreasing home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a hard thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Peterson Appraisal Group, we're masters at analyzing value trends in Rocklin, Placer County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally drop the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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