Let Rancho Vista Appraisals help you discover if you can cancel your PMIA 20% down payment is usually accepted when getting a mortgage. Since the risk for the lender is usually only the remainder between the home value and the sum due on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and regular value fluctuationson the chance that a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it became common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender endure the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the value of the property is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. It's beneficial for the lender because they secure the money, and they get paid if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can avoid bearing the expense of PMIWith the utilization of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. Acute home owners can get off the hook sooner than expected. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. It can take many years to get to the point where the principal is only 20% of the original loan amount, so it's necessary to know how your home has grown 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? Even when nationwide trends indicate declining home values, understand that real estate is local. Your neighborhood might not be reflecting the national trends and/or your home might have gained equity before things cooled off. 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 definitely help. As appraisers, it's our job to know the market dynamics of our area. At Rancho Vista Appraisals, we're masters at pinpointing value trends in Atascadero, San Luis Obispo County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will most often eliminate the PMI with little anxiety. At which time, the homeowner can enjoy the savings from that point on.
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