Have equity in your home? Want a lower payment? An appraisal from Appraisal Concept Services can help you get rid of your PMI.

It's largely known that a 20% down payment is the standard when purchasing a home. Considering the liability for the lender is generally only the difference between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the expenses of foreclosure, reselling the home, and natural value variations in the event a purchaser is unable to pay.

During the recent mortgage boom of the last decade, it was widespread to see lenders only asking for down payments of 10, 5, 3 or sometimes 0 percent. How does a lender manage the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender if a borrower is unable to pay on the loan and the market price of the property is less than the loan balance.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be expensive to a borrower. It's profitable for the lender because they collect the money, and they receive payment if the borrower defaults, in contrast to a piggyback loan where the lender absorbs all the losses.


	Is PMI a lineitem in your monthly house payment? Call Appraisal Concept Services today at 9518133542 or send us an e-mail. Documentation of your home's current value could save you thousands.

How can homebuyers refrain from bearing the expense of PMI?

The Homeowners Protection Act of 1998 makes the lenders on the majority of loans to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law designates that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, smart home owners can get off the hook a little earlier.

It can take a significant number of years to get to the point where the principal is only 80% of the initial amount borrowed, so it's necessary to know how your California home has appreciated in value. After all, every bit of appreciation you've achieved over time counts towards removing 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 follow national trends and/or your home could have gained equity before the economy declined. So even when nationwide trends forecast falling home values, you should realize that real estate is local.

The hardest thing for almost all consumers to determine is just when their home's equity goes over the 20% point. A certified, California licensed real estate appraiser can definitely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Appraisal Concept Services, we're experts at determining value trends in Murrieta, Riverside 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 generally drop the PMI with little trouble. At that time, the homeowner can relish the savings from that point on.


	Did you secure your mortgage with less than 20% down? Call Appraisal Concept Services today at 9518133542. You may be able to get rid of your Private Mortgage Insurance premium.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year