Have equity in your home? Want a lower payment? An appraisal from Bolton Appraisal Services can help you get rid of your PMI.A 20% down payment is usually the standard when getting a mortgage. Considering the risk for the lender is often only the remainder between the home value and the sum outstanding on the loan, the 20% supplies a nice buffer against the charges of foreclosure, selling the home again, and typical value variationson the chance that a purchaser defaults. During the recent mortgage boom of the last decade, it was common to see lenders taking down payments of 10, 5 or sometimes 0 percent. How does a lender handle the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the value of the property is less than what is owed on the loan. PMI is costly to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible. Opposite from a piggyback loan where the lender absorbs all the costs, PMI is advantageous for the lender because they secure the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer keep from bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Acute homeowners can get off the hook ahead of time. The law states that, upon request of the homeowner, the PMI must be dropped when the principal amount equals only 80 percent. It can take countless years to arrive at the point where the principal is only 20% of the original amount of the loan, so it's necessary to know how your home has increased in value. After all, every bit of appreciation you've achieved over time counts towards removing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Even when nationwide trends indicate plummeting home values, realize that real estate is local. Your neighborhood might not be heeding the national trends and/or your home might have acquired equity before things settled down. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a tough thing to know. As appraisers, it's our job to keep up with the market dynamics of our area. At Bolton Appraisal Services, we're masters at determining value trends in Fair Oaks, Sacramento County and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will generally drop the PMI with little effort. At that time, the homeowner can relish the savings from that point on.
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