Let Chuck Roberts & Associates help you determine if you can cancel your PMIWhen getting a mortgage, a 20% down payment is usually the standard. Since the risk for the lender is generally only the difference between the home value and the amount due on the loan, the 20% supplies a nice cushion against the costs of foreclosure, reselling the home, and natural value variationson the chance that a purchaser doesn't pay. Lenders were working with down payments down to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender handle the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender if a borrower is unable to pay on the loan and the value of the house is less than what the borrower still owes on the loan. PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible. It's profitable for the lender because they secure the money, and they receive payment if the borrower doesn't pay, different from a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How homeowners can refrain from bearing the expense of PMIWith the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law states that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. So, acute homeowners can get off the hook sooner than expected. It can take countless years to reach the point where the principal is just 20% of the original amount borrowed, so it's necessary to know how your home has appreciated in value. After all, any appreciation you've obtained over time counts towards dismissing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not be adopting the national trends and/or your home could have secured equity before things settled down, so even when nationwide trends indicate declining home values, you should realize that real estate is local. A certified, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. As appraisers, it's our job to know the market dynamics of our area. At Chuck Roberts & Associates, we know when property values have risen or declined. We're masters at analyzing value trends in Thousand Oaks, Ventura County and surrounding areas. Faced with data from an appraiser, the mortgage company will most often cancel the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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