Karen Mann & Associates - Appraisal and Expert Witness Services can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. The lender's liability is often only the remainder between the home value and the sum due on the loan, so the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and regular value fluctuations on the chance that a purchaser is unable to pay. Lenders were accepting down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the market price of the home is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be costly to a borrower. Contradictory to a piggyback loan where the lender consumes all the damages, PMI is favorable 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 homeowners can refrain from paying PMIWith the employment of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law pledges that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, savvy homeowners can get off the hook a little early. Since it can take countless years to reach the point where the principal is just 20% of the initial amount borrowed, it's important to know how your home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% mark? Your neighborhood might not be minding the national trends and/or your home could have secured equity before things cooled off, so even when nationwide trends hint at plunging home values, you should realize that real estate is local. The difficult thing for many homeowners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At Karen Mann & Associates - Appraisal and Expert Witness Services, we know when property values have risen or declined. We're masters at identifying value trends in Discovery Bay, Contra Costa County and surrounding areas. Faced with data from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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