Let 72 Hour Appraisals help you learn if you can get rid of your PMIIt's widely understood that a 20% down payment is the standard when buying a house. The lender's risk is oftentimes only the remainder between the home value and the sum outstanding on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, reselling the home, and regular value changes in the event a borrower doesn't pay. Banks were working with down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender manage the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower is unable to 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 rolled into the mortgage payment and generally isn't even tax deductible, PMI can be expensive to a borrower. Different from a piggyback loan where the lender absorbs all the costs, 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 can homebuyers refrain from paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law designates that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent. So, keen homeowners can get off the hook sooner than expected. Considering it can take many years to reach the point where the principal is just 20% of the original amount of the loan, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've accomplished over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home may have secured equity before things simmered down, so even when nationwide trends indicate plunging home values, you should realize that real estate is local. 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 definitely help. As appraisers, it's our job to know the market dynamics of our area. At 72 Hour Appraisals, we're experts at identifying value trends in Carmichael, Sacramento 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 do away with the PMI with little effort. At that time, the homeowner can delight in the savings from that point on.
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