Let C.D. McCullough Real Estate Appraisal help you figure out if you can cancel your PMIA 20% down payment is usually the standard when purchasing a home. Because the risk for the lender is oftentimes only the remainder between the home value and the amount due on the loan, the 20% provides a nice cushion against the expenses of foreclosure, reselling the home, and natural value changeson the chance that a borrower doesn't pay. During the recent mortgage boom of the last decade, it was customary to see lenders taking down payments of 10, 5 or sometimes 0 percent. A lender is able to manage the added risk of the reduced down payment with Private Mortgage Insurance or PMI. This added policy takes care of the lender if a borrower doesn't pay on the loan and the value of the home is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and many times isn't even tax deductible, PMI can be expensive to a borrower. It's profitable for the lender because they secure the money, and they get paid if the borrower defaults, different from a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homeowner avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically cease the PMI when the principal balance of the loan equals 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 reaches just 80 percent. So, savvy homeowners can get off the hook sooner than expected. It can take many years to arrive at the point where the principal is only 20% of the initial amount borrowed, so it's essential to know how your home has appreciated in value. After all, all of the appreciation you've achieved over time counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends signify decreasing home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home may have gained 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 recognize the market dynamics of our area. At C.D. McCullough Real Estate Appraisal, we know when property values have risen or declined. We're experts at determining value trends in Colton, San Bernardino County and surrounding areas. Faced with information from an appraiser, the mortgage company will usually drop the PMI with little anxiety. At that time, the home owner can relish the savings from that point on.
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Paying PMI?
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