Gil Appraisals can help you remove your Private Mortgage InsuranceIt's largely inferred that a 20% down payment is accepted when purchasing a home. Considering the liability for the lender is usually only the remainder between the home value and the sum due on the loan, the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and regular value changeson the chance that a borrower is unable to pay. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders taking down payments of 10, 5 or often 0 percent. How does a lender manage the additional risk of the small down payment? The answer is 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. PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible. It's beneficial for the lender because they acquire the money, and they get paid if the borrower doesn't pay, different from a piggyback loan where the lender absorbs 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 a homeowner avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Savvy homeowners can get off the hook sooner than expected. The law promises that, upon request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent. Considering it can take countless years to reach the point where the principal is only 20% of the initial amount of the loan, it's important to know how your home has increased in value. After all, every bit of appreciation you've obtained over the years counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% mark? Even when nationwide trends hint at declining home values, understand that real estate is local. Your neighborhood may not be heeding the national trends and/or your home could have gained equity before things simmered down. The hardest thing for almost all home owners to understand is just when their home's equity rises above the 20% point. An accredited, licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At Gil Appraisals, we know when property values have risen or declined. We're masters at determining value trends in Kapolei, Honolulu County and surrounding areas. When faced with information from an appraiser, the mortgage company will often cancel the PMI with little trouble. At which time, the home owner can enjoy the savings from that point on.
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