Let Value Vision Appraisals help you determine if you can eliminate your PMIWhen purchasing a home, a 20% down payment is typically the standard. The lender's risk is often only the difference between the home value and the amount due on the loan, so the 20% provides a nice buffer against the costs of foreclosure, reselling the home, and natural value fluctuations on the chance that a purchaser is unable to pay. The market was accepting down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the added risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI guards the lender if a borrower defaults on the loan and the market price of the property is lower than what the borrower still owes on the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible. It's advantageous for the lender because they acquire the money, and they receive payment if the borrower doesn't pay, contradictory to a piggyback loan where the lender absorbs 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 home buyers avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law pledges that, upon request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. So, keen home owners can get off the hook a little early. Considering it can take countless years to get to the point where the principal is just 20% of the original amount of the loan, it's essential to know how your home has appreciated in value. After all, any appreciation you've acquired over the years counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% mark? Even when nationwide trends forecast plunging home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have acquired equity before things calmed down. The toughest thing for many homeowners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to understand the market dynamics of our area. At Value Vision Appraisals, we know when property values have risen or declined. We're masters at pinpointing value trends in San Diego, Orange County and surrounding areas. When faced with data from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At that time, the home owner can enjoy the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |