All City Appraisal can help you remove your Private Mortgage InsuranceA 20% down payment is usually the standard when getting a mortgage. The lender's liability is usually only the difference between the home value and the amount due on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and natural value variations in the event a borrower doesn't pay. The market was accepting down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower defaults on the loan and the value of the home is less than the loan balance. PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and often isn't even tax deductible. It's profitable for the lender because they acquire the money, and they get the money if the borrower is unable to 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 can a home owner keep from bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Keen homeowners can get off the hook a little early. The law pledges 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 reach the point where the principal is only 20% of the initial loan amount, it's important to know how your home has appreciated in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Even when nationwide trends predict plummeting home values, be aware that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have gained equity before things settled down. The toughest thing for most homeowners to understand 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 recognize the market dynamics of our area. At All City Appraisal, we're experts at determining value trends in Woodland Hills, Los Angeles County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will usually remove the PMI with little anxiety. At which time, the home owner can retain the savings from that point on.
Want to learn more about PMI and the Homeowners Protection Act? Click this link: |