Have equity in your home? Want a lower payment? An appraisal from Precise Home Appraisals can help you get rid of your PMI.It's typically inferred that a 20% down payment is accepted when buying a house. Because the liability for the lender is generally only the difference between the home value and the amount due on the loan, the 20% provides a nice cushion against the costs of foreclosure, reselling the home, and natural value variationson the chance that a purchaser is unable to 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. A lender is able to handle the increased risk of the low down payment with Private Mortgage Insurance or PMI. This supplemental policy protects the lender if a borrower defaults on the loan and the market price of the house is lower than what is owed on the loan. PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. Different from a piggyback loan where the lender takes in all the costs, PMI is profitable for the lender because they secure 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 a homeowner prevent paying PMI?With the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law states that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, acute homeowners can get off the hook sooner than expected. It can take countless years to get to the point where the principal is only 20% of the initial amount of the loan, so it's important to know how your home has increased in value. After all, every bit of appreciation you've obtained over time counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends hint at plunging home values, be aware that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home may have acquired equity before things simmered down. The hardest thing for almost all homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to know the market dynamics of our area. At Precise Home Appraisals, we're experts at identifying value trends in Auburn, Placer County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will usually do away with the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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