Have equity in your home? Want a lower payment? An appraisal from James P Spas & Associates can help you get rid of your PMI.When purchasing a home, a 20% down payment is usually the standard. The lender's liability is oftentimes only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and natural value fluctuations in the event a purchaser doesn't pay. The market was working with down payments as low as 10, 5 and even 0 percent during the mortgage boom of the last decade. A lender is able to manage the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower defaults on the loan and the value of the property is lower than the loan balance. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and many times isn't even tax deductible, PMI can be costly to a borrower. Different from a piggyback loan where the lender absorbs all the losses, PMI is advantageous for the lender because they acquire the money, and they receive payment if the borrower defaults. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can keep from paying PMIWith the utilization of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law stipulates that, at the request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. So, wise homeowners can get off the hook a little early. It can take countless years to reach the point where the principal is only 20% of the initial amount borrowed, so it's crucial to know how your home has appreciated in value. After all, all of the appreciation you've acquired over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Despite the fact that nationwide trends predict declining home values, realize that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have gained equity before things cooled off. The hardest thing for most home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can definitely help. As appraisers, it's our job to know the market dynamics of our area. At James P Spas & Associates, we're experts at identifying value trends in Costa Mesa, Orange County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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