K. Podgorski can help you remove your Private Mortgage InsuranceA 20% down payment is usually accepted when buying a house. Because the liability for the lender is generally only the difference between the home value and the sum remaining on the loan, the 20% provides a nice cushion against the costs of foreclosure, reselling the home, and typical value changesin the event a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it became 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 answer is Private Mortgage Insurance or PMI. This added policy takes care of the lender in case a borrower is unable to pay on the loan and the market price of the property is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and generally isn't even tax deductible, PMI can be costly to a borrower. It's favorable for the lender because they collect 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 homebuyers can avoid bearing the expense of PMIThe Homeowners Protection Act of 1998 forces the lenders on most loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law pledges that, at the request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. So, wise homeowners can get off the hook sooner than expected. It can take many years to reach the point where the principal is only 20% of the initial amount of the loan, so it's necessary to know how your home has grown in value. After all, any appreciation you've obtained over the years counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Despite the fact that nationwide trends signify decreasing home values, understand that real estate is local. Your neighborhood may not be adopting the national trends and/or your home could have gained equity before things settled down. The hardest thing for almost all homeowners to know 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 recognize the market dynamics of our area. At K. Podgorski, we're experts at recognizing value trends in La Quinta, Riverside County and surrounding areas, and we know when property values have risen or declined. Faced with information from an appraiser, the mortgage company will most often remove the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.
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