Johnson & Associates Appraisal Services can help you remove your Private Mortgage InsuranceA 20% down payment is typically accepted when buying a house. The lender's liability is oftentimes only the remainder between the home value and the amount due on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and natural value changes on the chance that a purchaser is unable to pay. The market was taking down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the increased risk of the low down payment with Private Mortgage Insurance or PMI. This supplemental policy covers the lender in the event a borrower defaults on the loan and the market price of the house is lower than the balance of the loan. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and generally isn't even tax deductible. Opposite from a piggyback loan where the lender absorbs all the damages, PMI is profitable for the lender because they obtain the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can prevent bearing the expense of PMIThe Homeowners Protection Act of 1998 requires the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law states that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, keen home owners can get off the hook ahead of time. It can take countless years to arrive at the point where the principal is just 20% of the original loan amount, so it's crucial to know how your home has increased in value. After all, every bit of appreciation you've obtained over the years counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends forecast falling home values, realize that real estate is local. Your neighborhood might not be minding the national trends and/or your home may have secured equity before things simmered down. The hardest thing for almost all 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. As appraisers, it's our job to understand the market dynamics of our area. At Johnson & Associates Appraisal Services, we know when property values have risen or declined. We're experts at pinpointing value trends in Moreno Valley, Riverside County and surrounding areas. When faced with information from an appraiser, the mortgage company will usually drop the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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