Have equity in your home? Want a lower payment? An appraisal from Solid Foundation Appraisals can help you get rid of your PMI.When purchasing a home, a 20% down payment is typically the standard. Because the liability for the lender is oftentimes only the remainder between the home value and the amount outstanding on the loan, the 20% supplies a nice cushion against the costs of foreclosure, selling the home again, and regular value variationsin the event a purchaser is unable to pay. During the recent mortgage boom of the last decade, it was widespread to see lenders commanding down payments of 10, 5 or sometimes 0 percent. How does a lender endure the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This additional policy takes care of the lender if a borrower defaults on the loan and the value of the property is lower than the balance of the loan. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and often isn't even tax deductible. It's lucrative for the lender because they acquire the money, and they receive payment if the borrower defaults, separate from a piggyback loan where the lender consumes all the deficits. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers avoid bearing the cost of PMI?With the implementation of The Homeowners Protection Act of 1998, on nearly all loans lenders are required to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. Savvy home owners can get off the hook a little early. The law guarantees that, upon request of the homeowner, the PMI must be abandoned when the principal amount equals only 80 percent. It can take many years to arrive at the point where the principal is just 20% of the original amount of the loan, so it's important to know how your home has grown in value. After all, all of the appreciation you've gained over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends hint at plunging home values, understand that real estate is local. Your neighborhood might not be adhering to the national trends and/or your home might have gained equity before things simmered down. An accredited, licensed real estate appraiser can help home owners understand just when their home's equity goes over the 20% point, as it's a hard thing to know. It's an appraiser's job to recognize the market dynamics of their area. At Solid Foundation Appraisals, we know when property values have risen or declined. We're experts at identifying value trends in Santa Rosa, Sonoma County and surrounding areas. Faced with data from an appraiser, the mortgage company will often eliminate the PMI with little effort. At that time, the home owner can retain the savings from that point on.
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