Tavares Appraisals can help you remove your Private Mortgage InsuranceIt's generally understood that a 20% down payment is accepted when purchasing a home. The lender's liability is often only the difference between the home value and the sum outstanding on the loan, so the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and typical value changes on the chance that a purchaser is unable to pay. During the recent mortgage boom of the last decade, it was customary to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender endure the added risk of the small 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 property is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI is pricey to a borrower. Contradictory to a piggyback loan where the lender absorbs all the damages, PMI is lucrative for the lender because they secure 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 can home owners prevent bearing the expense of PMI?With the employment of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law states that, upon request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. So, smart homeowners can get off the hook a little early. It can take countless years to arrive at the point where the principal is just 20% of the initial amount borrowed, so it's important to know how your home has increased in value. After all, every bit of appreciation you've accomplished over time counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Your neighborhood might not be heeding the national trends and/or your home may have acquired equity before things cooled off, so even when nationwide trends forecast plummeting home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Tavares Appraisals, we're experts at pinpointing value trends in Fremont, Alameda County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will generally remove the PMI with little trouble. At which time, the home owner can delight in the savings from that point on.
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