Let Tavares Appraisals help you discover if you can cancel your PMIWhen purchasing a home, a 20% down payment is typically the standard. The lender's liability is generally only the difference between the home value and the amount remaining on the loan, so the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and regular value fluctuations in the event a purchaser doesn't 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. A lender is able to endure the increased risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower is unable to pay on the loan and the value of the home is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible, PMI can be expensive to a borrower. It's money-making for the lender because they collect the money, and they get the money if the borrower doesn't pay, different from a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers avoid paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law promises that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, wise homeowners can get off the hook a little earlier. It can take countless years to get to the point where the principal is only 20% of the initial amount borrowed, so it's essential to know how your home has increased in value. After all, all of the appreciation you've accomplished over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Despite the fact that 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 could have secured equity before things calmed down. 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 hard thing to know. As appraisers, it's our job to know the market dynamics of our area. At Tavares Appraisals, we're experts at analyzing 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 often drop the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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