Have equity in your home? Want a lower payment? An appraisal from Gold Coast Valuations can help you get rid of your PMI.A 20% down payment is typically accepted when purchasing a home. Since the liability for the lender is usually only the remainder between the home value and the sum remaining on the loan, the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and natural value variationsin the event a borrower is unable to pay. During the recent mortgage boom of the last decade, it was customary to see lenders requiring down payments of 10, 5 or often 0 percent. How does a lender endure the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower defaults on the loan and the market price of the house is less than the loan balance. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible, PMI is pricey to a borrower. Unlike a piggyback loan where the lender absorbs all the deficits, PMI is beneficial for the lender because they acquire the money, and they get the money 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 homebuyers can avoid bearing the expense of PMIWith the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, wise homeowners can get off the hook a little earlier. It can take many years to get to the point where the principal is only 20% of the original loan amount, so it's important to know how your home has appreciated in value. After all, all of the appreciation you've accomplished over time counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be adhering to the national trends and/or your home might have acquired equity before things settled down, so even when nationwide trends indicate decreasing home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Gold Coast Valuations, we're masters at recognizing value trends in Orangevale, Sacramento County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often cancel the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.
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