California Coast Appraisal can help you remove your Private Mortgage InsuranceWhen getting a mortgage, a 20% down payment is usually the standard. Because the risk for the lender is often only the difference between the home value and the sum due on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and regular value fluctuationsin the event a borrower defaults. During the recent mortgage upturn of the last decade, it was customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the value of the house is less than the loan balance. PMI is pricey to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and often isn't even tax deductible. Separate from a piggyback loan where the lender consumes all the costs, PMI is beneficial for the lender because they acquire the money, and they get paid 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 buyers can keep from bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. Acute homeowners can get off the hook sooner than expected. The law pledges that, at the request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. 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 grown in value. After all, all of the appreciation you've gained over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be adhering to the national trends and/or your home could have secured equity before things calmed down, so even when nationwide trends hint at plummeting home values, you should realize that real estate is local. 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 understand the market dynamics of our area. At California Coast Appraisal, we know when property values have risen or declined. We're experts at analyzing value trends in Long Beach, Los Angeles County and surrounding areas. When faced with figures from an appraiser, the mortgage company will often do away with the PMI with little trouble. At that time, the homeowner can delight in the savings from that point on.
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