Have equity in your home? Want a lower payment? An appraisal from Golden Gate Appraisal can help you get rid of your PMI.It's largely understood that a 20% down payment is the standard when buying a house. The lender's risk is often only the difference between the home value and the amount due on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and typical value variations on the chance that a borrower is unable to pay. Lenders were working with down payments down to 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender handle the additional risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This added plan protects the lender in the event a borrower is unable to pay on the loan and the value of the property is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. Different from a piggyback loan where the lender absorbs all the deficits, PMI is beneficial for the lender because they collect the money, and they get the money 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 can a buyer avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law guarantees that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, smart home owners 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 loan amount, so it's crucial to know how your home has appreciated in value. After all, any appreciation you've gained over the years counts towards abolishing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% mark? Your neighborhood may not be following the national trends and/or your home might have acquired equity before things simmered down, so even when nationwide trends signify plummeting home values, you should understand that real estate is local. The hardest thing for most home owners to know is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can certainly help. As appraisers, it's our job to understand the market dynamics of our area. At Golden Gate Appraisal, we know when property values have risen or declined. We're masters at determining value trends in Oakland, Alameda County and surrounding areas. When faced with data from an appraiser, the mortgage company will usually cancel the PMI with little effort. At which time, the home owner can delight in the savings from that point on.
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