Have equity in your home? Want a lower payment? An appraisal from Curtis Bay Area Appraisals can help you get rid of your PMI.When purchasing a home, a 20% down payment is usually the standard. The lender's liability is often only the remainder between the home value and the sum due on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and typical value changes on the chance that a borrower doesn't pay. Banks were taking down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible, PMI can be expensive to a borrower. Separate from a piggyback loan where the lender absorbs all the damages, PMI is advantageous for the lender because they secure the money, and they get paid 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 buyers can refrain from bearing the expense of PMIThe Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law guarantees that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent. So, smart home owners can get off the hook sooner than expected. Since it can take many years to get to the point where the principal is only 20% of the original amount borrowed, it's necessary 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 what's the reason for paying it after your loan balance has dropped below the 80% mark? Even when nationwide trends forecast declining home values, be aware that real estate is local. Your neighborhood may not be minding the national trends and/or your home might have acquired equity before things simmered down. The difficult thing for almost all homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Curtis Bay Area Appraisals, we know when property values have risen or declined. We're masters at determining value trends in Danville, Contra Costa County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the home owner can delight in the savings from that point on.
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