Karen Mann & Associates - Appraisal and Expert Witness Services can help you remove your Private Mortgage InsuranceWhen buying a house, a 20% down payment is usually the standard. 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 buffer against the costs of foreclosure, reselling the home, and regular value variations on the chance that a purchaser doesn't pay. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders commanding down payments of 10, 5 or often 0 percent. How does a lender endure the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This supplementary policy covers the lender if a borrower is unable to pay on the loan and the value of the property is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI is costly to a borrower. It's advantageous for the lender because they acquire the money, and they get the money if the borrower doesn't pay, different from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers keep from bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Acute homeowners can get off the hook ahead of time. The law states that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. It can take countless years to get to the point where the principal is only 20% of the original amount borrowed, so it's necessary to know how your home has grown in value. After all, all of the appreciation you've accomplished over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends hint at plunging 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 settled down. The toughest thing for many home owners to understand is just when their home's equity goes over the 20% point. A certified, licensed real estate appraiser can certainly help. It is an appraiser's job to understand the market dynamics of their area. At Karen Mann & Associates - Appraisal and Expert Witness Services, we're experts at identifying value trends in Discovery Bay, Contra Costa County and surrounding areas, and we know when property values have risen or declined. Faced with data from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At that time, the home owner can delight in the savings from that point on.
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