Barnard & Associates Appraisal Services can help you remove your Private Mortgage InsuranceIt's typically inferred that a 20% down payment is common 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% provides a nice cushion against the expenses of foreclosure, selling the home again, and regular value changes in the event a borrower defaults. The market was accepting down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower is unable to pay on the loan and the value of the house is lower than the balance of the loan. PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible. It's profitable for the lender because they collect the money, and they receive payment if the borrower defaults, separate from a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home buyers avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Acute home owners can get off the hook sooner than expected. The law stipulates that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. Since it can take countless years to get to the point where the principal is just 20% of the original amount borrowed, it's necessary to know how your home has appreciated in value. After all, all of the appreciation you've gained over the years counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% mark? Despite the fact that nationwide trends signify decreasing home values, understand that real estate is local. Your neighborhood might not be heeding the national trends and/or your home might have acquired equity before things cooled off. An accredited, licensed real estate appraiser can help homeowners 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 know the market dynamics of our area. At Barnard & Associates Appraisal Services, we're experts at determining value trends in Lake Forest, Orange County and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.
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