Let Tavares Appraisals help you figure out if you can eliminate your PMIA 20% down payment is typically accepted when purchasing a home. The lender's risk is usually only the difference between the home value and the sum remaining on the loan, so the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and natural value variations on the chance that a purchaser is unable to pay. The market was taking down payments as low as 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. A lender is able to manage the additional risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower is unable to pay on the loan and the market price of the property is less than what the borrower still owes on the loan. PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible. Different from a piggyback loan where the lender takes in all the losses, PMI is profitable for the lender because they acquire the money, and they get paid 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 a homeowner prevent paying PMI?The Homeowners Protection Act of 1998 requires the lenders on most loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law stipulates 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 ahead of time. It can take countless years to reach the point where the principal is just 20% of the initial amount borrowed, so it's essential to know how your home has grown in value. After all, any appreciation you've acquired over the years counts towards removing PMI. So why should you pay it after your loan balance has dropped below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home might have gained equity before things cooled off, so even when nationwide trends hint at plunging home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Tavares Appraisals, we know when property values have risen or declined. We're masters at determining value trends in Fremont, Alameda County and surrounding areas. When faced with data from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.
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