Let AMT Appraisals help you figure out if you can cancel your PMIA 20% down payment is usually the standard when purchasing a home. Since the liability for the lender is generally only the difference between the home value and the amount outstanding on the loan, the 20% provides a nice buffer against the charges of foreclosure, reselling the home, and typical value fluctuationson the chance that a borrower doesn't pay. During the recent mortgage boom of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or sometimes 0 percent. A lender is able to endure the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. PMI covers the lender in case a borrower defaults on the loan and the value of the home is lower than the balance of the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. It's profitable for the lender because they collect the money, and they get the money if the borrower is unable to pay, unlike a piggyback loan where the lender absorbs all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a homebuyer avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 requires the lenders on nearly all loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law guarantees that, at the request of the homeowner, the PMI must be abandoned when the principal amount equals just 80 percent. So, savvy homeowners can get off the hook ahead of time. It can take many years to get to the point where the principal is just 20% of the original amount borrowed, so it's important to know how your home has increased in value. After all, every bit of appreciation you've accomplished over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Despite the fact that nationwide trends indicate declining home values, understand that real estate is local. Your neighborhood may not be following the national trends and/or your home might have gained equity before things simmered down. The difficult thing for most home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can certainly help. It is an appraiser's job to keep up with the market dynamics of their area. At AMT Appraisals, we're masters at recognizing value trends in Bakersfield, Kern County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will often drop the PMI with little anxiety. At that time, the home owner can retain the savings from that point on.
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