Have equity in your home? Want a lower payment? An appraisal from Peterson Appraisal Group can help you get rid of your PMI.It's largely known that a 20% down payment is common when getting a mortgage. The lender's risk is usually only the difference between the home value and the amount remaining on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and natural value changes on the chance that a borrower defaults. During the recent mortgage boom of the mid 2000s, it became common to see lenders requiring down payments of 10, 5 or even 0 percent. How does a lender handle the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender if a borrower doesn't pay on the loan and the market price of the house is lower than the loan balance. 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 is costly to a borrower. Contradictory to a piggyback loan where the lender consumes all the losses, PMI is favorable for the lender because they acquire the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homebuyers can keep from paying PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Savvy home owners can get off the hook a little early. The law stipulates that, upon request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. Since it can take many years to reach the point where the principal is only 20% of the initial amount of the loan, 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 why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home may have gained equity before things cooled off, so even when nationwide trends predict plunging home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. It's an appraiser's job to understand the market dynamics of their area. At Peterson Appraisal Group, we know when property values have risen or declined. We're experts at recognizing value trends in Rocklin, Placer County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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