Have equity in your home? Want a lower payment? An appraisal from Tim Brown can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. Since the liability for the lender is generally only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the costs of foreclosure, reselling the home, and typical value variationsin the event a borrower is unable to pay. The market was taking down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This added plan takes care of the lender in the event a borrower doesn't pay on the loan and the worth of the house is lower than what the borrower still owes on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible, PMI can be costly to a borrower. Contradictory to a piggyback loan where the lender takes in all the deficits, PMI is profitable for the lender because they secure 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 buyers avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Wise home owners can get off the hook ahead of time. The law designates that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches just 80 percent. Since it can take many years to get to the point where the principal is just 20% of the original loan amount, it's essential to know how your home has appreciated in value. After all, every bit of appreciation you've obtained over time counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends forecast falling home values, understand that real estate is local. Your neighborhood may not be minding the national trends and/or your home could have acquired equity before things calmed down. A certified, 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 keep up with the market dynamics of our area. At Tim Brown, we know when property values have risen or declined. We're masters at determining value trends in Oceanside, San Diego County and surrounding areas. Faced with figures from an appraiser, the mortgage company will usually do away with the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.
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