Let Farid Rangchi help you determine if you can cancel your PMIIt's typically inferred that a 20% down payment is the standard when purchasing a home. Since the risk for the lender is oftentimes only the difference between the home value and the sum remaining on the loan, the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and typical value variationson the chance that a borrower defaults. During the recent mortgage boom of the last decade, it became customary to see lenders taking down payments of 10, 5 or often 0 percent. A lender is able to manage the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This added plan protects the lender in the event a borrower doesn't pay on the loan and the value of the house is less than what is owed on the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and oftentimes isn't even tax deductible. It's money-making for the lender because they acquire the money, and they get the money if the borrower defaults, unlike a piggyback loan where the lender takes in all the damages. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How home buyers can keep from bearing the cost of PMIThe Homeowners Protection Act of 1998 obligates the lenders on most loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law designates that, upon request of the homeowner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, acute homeowners can get off the hook sooner than expected. Considering it can take countless years to arrive at the point where the principal is only 20% of the original amount of the loan, it's necessary to know how your home has appreciated in value. After all, every bit of appreciation you've acquired over time counts towards dismissing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be minding the national trends and/or your home might have gained equity before things simmered down, so even when nationwide trends hint at falling home values, you should understand that real estate is local. A certified, licensed real estate appraiser can help homeowners 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 recognize the market dynamics of our area. At Farid Rangchi, we know when property values have risen or declined. We're experts at analyzing value trends in Laguna Niguel, Orange County and surrounding areas. Faced with figures from an appraiser, the mortgage company will often remove the PMI with little anxiety. At that time, the homeowner can enjoy the savings from that point on.
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