Rahn Appraisals can help you remove your Private Mortgage InsuranceIt's largely inferred that a 20% down payment is accepted when purchasing a home. Because the risk for the lender is usually only the remainder between the home value and the sum due on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value fluctuationsin the event a borrower doesn't pay. During the recent mortgage upturn of the mid 2000s, it was widespread to see lenders taking down payments of 10, 5 or even 0 percent. A lender is able to handle the added risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower doesn't pay on the loan and the worth of the house is less than the loan balance. PMI can be costly to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and generally isn't even tax deductible. It's money-making for the lender because they secure the money, and they get paid if the borrower defaults, separate from 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 home owner avoid paying 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 equals 78 percent of the initial loan amount. The law promises that, at the request of the homeowner, the PMI must be abandoned when the principal amount reaches just 80 percent. So, acute homeowners can get off the hook a little early. It can take many years to get to the point where the principal is just 20% of the original loan amount, so it's crucial to know how your home has appreciated in value. After all, any appreciation you've gained over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not be adopting the national trends and/or your home may have secured equity before things cooled off, so even when nationwide trends signify falling home values, you should realize that real estate is local. 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 hard thing to know. It's an appraiser's job to understand the market dynamics of their area. At Rahn Appraisals, we know when property values have risen or declined. We're experts at identifying value trends in Fairfield, Solano County and surrounding areas. When faced with figures from an appraiser, the mortgage company will generally do away with the PMI with little anxiety. At that time, the home owner can enjoy the savings from that point on.
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