Have equity in your home? Want a lower payment? An appraisal from Access Appraisals can help you get rid of your PMI.

It's largely understood that a 20% down payment is common when buying a house. The lender's risk is often only the remainder between the home value and the sum outstanding on the loan, so the 20% adds a nice buffer against the costs of foreclosure, selling the home again, and regular value changes in the event a borrower doesn't pay.

During the recent mortgage upturn that our country recently experienced, it became common to see lenders making deals with down payments of 10, 5 or often 0 percent. A lender is able to manage the added risk of the low down payment with Private Mortgage Insurance or PMI. This supplementary plan guards the lender in the event a borrower defaults on the loan and the value of the house is lower than the loan balance.

Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and oftentimes isn't even tax deductible, PMI is pricey to a borrower. Instead of a piggyback loan where the lender absorbs all the deficits, PMI is advantageous for the lender because they acquire the money, and they get the money if the borrower doesn't pay.


	Is PMI a lineitem in your monthly mortgage payment? Call Access Appraisals today at 530-478-1445 or send us an e-mail. A new appraisal could save you thousands.

How homeowners can avoid bearing the cost of PMI

The Homeowners Protection Act of 1998 obligates the lenders on the majority of loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Savvy 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 just 80 percent.

It can take a significant number of years to reach the point where the principal is just 80% of the original amount borrowed, so it's important to know how your California home has increased in value. After all, any appreciation you've obtained over time counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Even when nationwide trends signify falling home values, understand that real estate is local. Your neighborhood might not be adopting the national trends and/or your home might have acquired equity before things declined.

The difficult thing for almost all people to figure out is whether their home equity has exceeded the 20% point. An accredited, California licensed real estate appraiser can definitely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Access Appraisals, we're experts at recognizing value trends in Nevada City, Nevada County, and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will most often do away with the PMI with little effort. At that time, the home owner can relish the savings from that point on.


	Has your real estate appreciated since you first purchased? Contact Access Appraisals today at 530-478-1445 to see if you can cancel your Private Mortgage Insurance premium.

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