All Value Appraisal Service can help you remove your Private Mortgage Insurance

It's generally inferred that a 20% down payment is common when purchasing a home. Since the liability for the lender is generally only the remainder between the home value and the sum outstanding on the loan, the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and natural value variations in the event a borrower doesn't pay.

During the recent mortgage upturn that our country recently experienced, it was widespread to see lenders reducing down payments to 10, 5, 3 or even 0 percent. How does a lender handle the added risk of the low down payment? The solution is Private Mortgage Insurance or PMI. This additional plan takes care of the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower than the balance of the loan.

PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and oftentimes isn't even tax deductible. Separate from a piggyback loan where the lender consumes all the costs, PMI is favorable for the lender because they collect the money, and they are covered if the borrower defaults.


	Did you have less than 20% to put down on your mortgage? Contact All Value Appraisal Service today at (661) 259-7858 to see if you can cancel your Private Mortgage Insurance payment.

How can buyers keep from paying PMI?

With the passage of The Homeowners Protection Act of 1998, lenders are obligated to automatically stop the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount on most loans. The law states that, at the request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, wise home owners can get off the hook a little earlier.

It can take a significant number of years to get to the point where the principal is just 80% of the original amount borrowed, so it's crucial to know how your California home has appreciated in value. After all, any appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not conform to national trends and/or your home may have secured equity before the economy declined. So even when nationwide trends indicate falling home values, you should know most importantly that real estate is local.

A certified, California licensed real estate appraiser can help homeowners figure out just when their home's equity goes over the 20% point, as it's a difficult thing to know. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At All Value Appraisal Service, we're masters at recognizing value trends in Santa Clarita/Stevenson Ranch, Los Angeles County, and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally cancel the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.


	The savings from cancelling the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than All Value Appraisal Service when it comes to appreciating values in Santa Clarita/Stevenson Ranch and Los Angeles County. Contact us today.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year