Have equity in your home? Want a lower payment? An appraisal from All City Appraisal can help you get rid of your PMI.A 20% down payment is usually the standard when getting a mortgage. The lender's risk is oftentimes only the remainder between the home value and the sum remaining on the loan, so the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value fluctuations on the chance that a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became common to see lenders commanding down payments of 10, 5 or even 0 percent. How does a lender manage the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the worth of the property is less than what the borrower still owes on the loan. PMI is costly to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible. Opposite from a piggyback loan where the lender consumes all the losses, PMI is lucrative for the lender because they obtain the money, and they receive payment 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 can homebuyers keep from paying PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount. The law pledges that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. So, savvy home owners can get off the hook a little earlier. It can take many years to reach the point where the principal is only 20% of the initial amount borrowed, so it's necessary to know how your home has increased in value. After all, any appreciation you've accomplished over the years counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home might have gained equity before things simmered down, so even when nationwide trends predict decreasing home values, you should understand that real estate is local. The toughest thing for almost all homeowners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. It is an appraiser's job to know the market dynamics of their area. At All City Appraisal, we know when property values have risen or declined. We're masters at recognizing value trends in Woodland Hills, Los Angeles County and surrounding areas. Faced with information from an appraiser, the mortgage company will most often eliminate the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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