The Pinkston Group can help you remove your Private Mortgage Insurance

It's typically understood that a 20% down payment is the standard when purchasing a home. Since the risk for the lender is generally only the difference between the home value and the amount remaining on the loan, the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and natural value variations in the event a borrower defaults.

During the recent mortgage upturn of the mid 2000s, it was customary to see lenders making deals with down payments of 10, 5 or even 0 percent. How does a lender handle the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. This supplementary policy covers the lender if a borrower defaults on the loan and the market price of the home is lower than what is owed on the loan.

PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. Different from a piggyback loan where the lender consumes all the damages, PMI is profitable for the lender because they collect the money, and they get paid if the borrower is unable to pay.


	The amount you keep from getting rid of your PMI pays for the appraisal in no time. Nobody is more qualified than The Pinkston Group when it comes to appreciating values in the city of Aptos, Monterey, and San Jose and Santa Cruz County. Contact us today.

How can buyers prevent bearing the cost of PMI?

With the passage of The Homeowners Protection Act of 1998, lenders are required to automatically cease the PMI when the principal balance of the loan reaches 78 percent of the original loan amount on most loans. The law pledges that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, keen home owners can get off the hook sooner than expected.

It can take several years to reach the point where the principal is just 80% of the initial amount borrowed, so it's crucial to know how your California home has appreciated in value. After all, any appreciation you've accomplished over time counts towards dismissing PMI. So why should you pay it after your loan balance has fallen below the 80% mark? Your neighborhood might not adhere to national trends and/or your home may have secured equity before the economy cooled off. So even when nationwide trends hint at decreasing home values, you should understand that real estate is local.

The difficult thing for almost all people to determine is just when their home's equity goes over the 20% point. A certified, California licensed real estate appraiser can surely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At The Pinkston Group, we know when property values have risen or declined. We're experts at recognizing value trends in Aptos, Santa Cruz County, and surrounding areas. When faced with data from an appraiser, the mortgage company will generally remove the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.


	The amount you keep from getting rid of your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than The Pinkston Group when it comes to appreciating values in Aptos, Monterey, and San Jose and Santa Cruz County. Contact us today.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year