Let Peterson Appraisal Group help you figure out if you can cancel your PMIA 20% down payment is usually the standard when purchasing a home. The lender's risk is oftentimes only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, reselling the home, and natural value fluctuations in the event a purchaser is unable to pay. During the recent mortgage upturn of the mid 2000s, it was common to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender handle the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplementary plan covers the lender in case a borrower doesn't pay on the loan and the market price of the home is less than what is owed on the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. It's favorable for the lender because they obtain the money, and they receive payment if the borrower defaults, unlike a piggyback loan where the lender takes in all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer keep from bearing the expense of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Keen homeowners can get off the hook a little early. The law stipulates that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. Because it can take many years to arrive at the point where the principal is only 20% of the initial loan amount, it's necessary to know how your home has grown in value. After all, every bit of appreciation you've achieved over time counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends predict plunging home values, realize that real estate is local. Your neighborhood may not be adopting the national trends and/or your home might have acquired equity before things cooled off. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over 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 Peterson Appraisal Group, we know when property values have risen or declined. We're masters at recognizing value trends in Rocklin, Placer County and surrounding areas. Faced with figures from an appraiser, the mortgage company will most often eliminate the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
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