Let Diversified Real Estate Activities Inc. (805) 388-5507 help you discover if you can get rid of your PMIIt's largely inferred that a 20% down payment is common when purchasing a home. Considering the risk for the lender is generally 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, selling the home again, and natural value fluctuationsin the event a borrower defaults. During the recent mortgage upturn of the mid 2000s, it became widespread to see lenders taking down payments of 10, 5 or even 0 percent. How does a lender handle the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in case a borrower defaults on the loan and the market price of the house is lower than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and oftentimes isn't even tax deductible, PMI can be pricey to a borrower. Unlike a piggyback loan where the lender takes in all the damages, PMI is beneficial for the lender because they secure the money, and they receive payment 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 prevent paying PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. Wise home owners can get off the hook beforehand. The law pledges that, upon request of the homeowner, the PMI must be released when the principal amount equals only 80 percent. Because it can take many years to get to the point where the principal is just 20% of the original amount of the loan, it's crucial to know how your home has increased in value. After all, every bit of appreciation you've gained over time counts towards abolishing PMI. So why pay it after your loan balance has dropped below the 80% mark? Despite the fact that nationwide trends predict decreasing home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have gained equity before things settled 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 understand the market dynamics of our area. At Diversified Real Estate Activities Inc. (805) 388-5507, we know when property values have risen or declined. We're masters at analyzing value trends in Camarillo, Ventura County and surrounding areas. Faced with figures from an appraiser, the mortgage company will often do away with the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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