AppraisalWorks can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is typically the standard. Because the liability for the lender is often only the difference between the home value and the amount remaining on the loan, the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and natural value variationson the chance that a purchaser is unable to pay. During the recent mortgage boom of the mid 2000s, it was customary to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender endure the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This additional plan protects the lender in the event a borrower is unable to pay on the loan and the worth of the house is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender takes in all the losses, PMI is money-making for the lender because they acquire the money, and they get paid 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 prevent bearing the expense of PMIThe Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Keen homeowners can get off the hook beforehand. The law states that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. Since it can take many years to reach the point where the principal is just 20% of the original amount borrowed, it's important to know how your home has grown in value. After all, every bit of appreciation you've accomplished over time counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood may not be adopting the national trends and/or your home may have acquired equity before things calmed down, so even when nationwide trends predict plummeting home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It is an appraiser's job to recognize the market dynamics of their area. At AppraisalWorks, we know when property values have risen or declined. We're masters at analyzing value trends in Sherman Oaks, Los Angeles County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often do away with the PMI with little effort. At that time, the home owner can relish the savings from that point on.
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