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 understood that a 20% down payment is common when purchasing a home. Since the risk for the lender is usually only the remainder between the home value and the sum outstanding on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and typical value variationson the chance that a purchaser defaults. Lenders were taking down payments as low as 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. PMI covers the lender if a borrower doesn't pay on the loan and the value of the house is lower than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible, PMI can be pricey to a borrower. It's money-making for the lender because they obtain the money, and they get paid if the borrower is unable to pay, different from a piggyback loan where the lender consumes all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers keep from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. So, acute home owners can get off the hook a little earlier. It can take many years to arrive at the point where the principal is only 20% of the original amount of the loan, so it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends signify plunging home values, be aware that real estate is local. Your neighborhood may not be adhering to the national trends and/or your home may have secured equity before things simmered down. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It's an appraiser's job to know the market dynamics of their area. At Peterson Appraisal Group, we're masters at pinpointing value trends in Rocklin, Placer County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often drop the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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