Have equity in your home? Want a lower payment? An appraisal from Tavares Appraisals can help you get rid of your PMI.When purchasing a home, a 20% down payment is usually the standard. The lender's liability is usually only the difference between the home value and the amount due on the loan, so the 20% adds a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuations on the chance that a borrower defaults. The market was working with down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender endure the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower doesn't pay on the loan and the worth of the house is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly 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 lucrative for the lender because they acquire the money, and they get the money if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home owners can refrain from bearing the expense of PMIThe Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Smart home owners can get off the hook beforehand. The law stipulates that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. It can take countless years to reach the point where the principal is only 20% of the original amount borrowed, so it's essential to know how your home has appreciated in value. After all, any appreciation you've achieved over the years counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends indicate plummeting home values, realize that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have secured equity before things calmed down. The hardest thing for most home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can definitely help. It's an appraiser's job to understand the market dynamics of their area. At Tavares Appraisals, we're masters at pinpointing value trends in Fremont, Alameda 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 often drop the PMI with little trouble. At which time, the home owner can retain the savings from that point on.
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