Let Avion Insights help you discover if you can get rid of your PMIIt's widely inferred that a 20% down payment is accepted when buying a house. Considering the liability for the lender is often only the difference between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the costs of foreclosure, reselling the home, and typical value variationson the chance that a borrower doesn't pay. Lenders were taking down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. How does a lender endure the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This added policy takes care of the lender if a borrower defaults on the loan and the market price of the property is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be costly to a borrower. Different from a piggyback loan where the lender absorbs all the costs, PMI is advantageous for the lender because they acquire the money, and they get the money if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners prevent bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are required to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Keen home owners can get off the hook beforehand. The law states that, at the request of the home owner, the PMI must be released when the principal amount equals only 80 percent. It can take many years to reach the point where the principal is just 20% of the original loan amount, so it's necessary to know how your home has increased in value. After all, any appreciation you've obtained over the years counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% threshold? Even when nationwide trends hint at plunging home values, be aware that real estate is local. Your neighborhood might not be heeding the national trends and/or your home could have gained equity before things cooled off. The difficult thing for many homeowners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to know the market dynamics of our area. At Avion Insights, we're masters at determining value trends in San Diego, San Diego County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often do away with the PMI with little trouble. At which time, the home owner can relish the savings from that point on.
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