Premier Appraisal of SoCal can help you remove your Private Mortgage InsuranceIt's typically known that a 20% down payment is common when getting a mortgage. The lender's liability is oftentimes only the difference between the home value and the sum due on the loan, so the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and regular value changes in the event a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it was common to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender handle the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplemental plan protects the lender in case a borrower defaults on the loan and the value of the property is less than the balance of the loan. PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and frequently isn't even tax deductible. Different from a piggyback loan where the lender consumes all the deficits, PMI is favorable for the lender because they acquire the money, and they get the money if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers avoid bearing the cost of PMI?With the utilization of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law guarantees that, upon request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, savvy home owners can get off the hook ahead of time. It can take many years to arrive at the point where the principal is just 20% of the initial loan amount, so it's essential to know how your home has increased in value. After all, any appreciation you've gained over the years counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be adhering to the national trends and/or your home might have gained equity before things calmed down, so even when nationwide trends forecast decreasing home values, you should understand that real estate is local. The hardest thing for most home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At Premier Appraisal of SoCal, we're masters at recognizing value trends in Mission Viejo, Orange 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 cancel the PMI with little effort. At that time, the home owner can retain the savings from that point on.
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