Tavares Appraisals can help you remove your Private Mortgage InsuranceA 20% down payment is usually the standard when getting a mortgage. Since the risk for the lender is generally only the remainder between the home value and the amount due on the loan, the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and typical value fluctuationsin the event a purchaser defaults. The market was taking down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender endure the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower defaults on the loan and the market price of the house is lower than what the borrower still owes on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible, PMI is pricey to a borrower. It's favorable for the lender because they collect the money, and they get the money if the borrower is unable to pay, opposite from a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law stipulates that, at the request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, acute homeowners can get off the hook a little early. It can take countless years to reach the point where the principal is only 20% of the initial loan amount, so it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over the years counts towards removing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Despite the fact that nationwide trends hint at falling home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have gained equity before things cooled off. The difficult thing for most home owners to know is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can definitely help. It's an appraiser's job to understand the market dynamics of their area. At Tavares Appraisals, we're masters at pinpointing value trends in Fremont, Alameda County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the homeowner can retain the savings from that point on.
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