NorCal Appraiser can help you remove your Private Mortgage Insurance

It's generally inferred that a 20% down payment is the standard when purchasing a home. The lender's risk is oftentimes only the remainder between the home value and the balance outstanding on the loan, so the 20% provides a nice cushion against the costs of foreclosure, reselling the home, and regular value fluctuations in the event a purchaser doesn't pay.

Lenders were taking down payments as low as 10, 5 and even 0 percent during the mortgage boom of the last decade. A lender is able to handle the increased risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary plan protects the lender in the event a borrower is unable to pay on the loan and the value of the property is less than what the borrower still owes on the loan.

Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI can be costly to a borrower. Separate from a piggyback loan where the lender absorbs all the damages, PMI is lucrative for the lender because they secure the money, and they get the money if the borrower is unable to pay.


	Does your monthly house payment include a fee PMI? Call NorCal Appraiser today at 916-479-4435 or send us an e-mail. A new appraisal could save you thousands.

How home buyers can refrain from paying PMI

As a result of The Homeowners Protection Act of 1998, lenders are obligated to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount on nearly all loans. Acute home owners can get off the hook ahead of time. The law designates that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent.

Since it can take many years to get to the point where the principal is only 80% of the initial amount borrowed, it's important to know how your California home has appreciated in value. After all, all of the appreciation you've obtained over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends forecast declining home values, realize that real estate is local. Your neighborhood might not be minding the national trends and/or your home might have secured equity before things simmered down.

The hardest thing for almost all consumers to figure out is whether their home equity has exceeded the 20% point. An accredited, California licensed real estate appraiser can surely help. It is an appraiser's job to recognize the market dynamics of their area. At NorCal Appraiser, we're experts at pinpointing value trends in Elk Grove, Sacramento 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 do away with the PMI with little effort. At which time, the homeowner can relish the savings from that point on.


	Does your monthly house payment have a lineitem for PMI? Call NorCal Appraiser today at 916-479-4435 or send us an e-mail. A new appraisal could save you thousands.

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