Jose Gandia can help you remove your Private Mortgage InsuranceIt's largely known that a 20% down payment is accepted when purchasing a home. The lender's liability is usually only the difference between the home value and the sum outstanding on the loan, so the 20% provides a nice cushion against the charges of foreclosure, selling the home again, and natural value variations in the event a borrower doesn't pay. The market was working with down payments as low as 10, 5 and often 0 percent during the mortgage boom of the last decade. A lender is able to manage the added risk of the low down payment with Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender in case a borrower doesn't pay on the loan and the value of the house is lower than the loan balance. PMI can be expensive to a borrower because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible. Different from a piggyback loan where the lender takes in all the costs, PMI is lucrative for the lender because they acquire the money, and they get paid if the borrower doesn't pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can buyers avoid bearing the cost of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cease 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 sooner than expected. The law stipulates that, at the request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. Considering it can take many years to reach the point where the principal is only 20% of the original amount borrowed, it's necessary to know how your home has increased in value. After all, all of the appreciation you've gained over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Your neighborhood may not be heeding the national trends and/or your home might have gained equity before things settled down, so even when nationwide trends hint at decreasing home values, you should realize that real estate is local. The difficult thing for most home owners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can certainly help. As appraisers, it's our job to keep up with the market dynamics of our area. At Jose Gandia, we know when property values have risen or declined. We're experts at pinpointing value trends in Winter Park, Orange County and surrounding areas. When faced with data from an appraiser, the mortgage company will often cancel the PMI with little effort. At which time, the homeowner can delight in the savings from that point on.
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