Karen Mann & Associates - Appraisal and Expert Witness Services can help you remove your Private Mortgage InsuranceIt's typically known that a 20% down payment is accepted when purchasing a home. Since the liability for the lender is often only the difference between the home value and the sum due on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value variationsin the event a purchaser is unable to pay. Lenders were working with 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 added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower doesn't pay on the loan and the market price of the home is less than the loan balance. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible. It's favorable for the lender because they acquire the money, and they get paid if the borrower defaults, opposite 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 home buyers can keep from bearing the cost of PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Wise homeowners can get off the hook a little early. The law promises 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 reach the point where the principal is just 20% of the initial amount of the loan, so it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've accomplished over the years counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends forecast plummeting 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. A certified, licensed real estate appraiser can help home owners understand just when their home's equity rises above the 20% point, as it's a difficult thing to know. As appraisers, it's our job to understand the market dynamics of our area. At Karen Mann & Associates - Appraisal and Expert Witness Services, we know when property values have risen or declined. We're masters at analyzing value trends in Discovery Bay, Contra Costa County and surrounding areas. Faced with data from an appraiser, the mortgage company will often eliminate the PMI with little effort. At which time, the homeowner can enjoy the savings from that point on.
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