Have equity in your home? Want a lower payment? An appraisal from California Home Appraisal can help you get rid of your PMI.It's generally inferred that a 20% down payment is the standard when getting a mortgage. Considering that the lender's risk typically lies in the difference between the home's market value and the outstanding loan balance, the 20% equity cushion provides a safeguard against potential losses due to foreclosure costs, resale expenses, market fluctuations, and borrower default. The market was accepting down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the increased risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI protects the lender in the event a borrower doesn't pay on the loan and the worth of the property is less than the loan balance. PMI can be expensive to a borrower in that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and many times isn't even tax deductible. Separate from a piggyback loan where the lender consumes all the costs, PMI is favorable for the lender because they acquire the money, and they receive payment if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home owner avoid bearing the expense of PMI?The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the initial loan amount. The law designates that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, acute homeowners can get off the hook ahead of time. Since it can take countless years to arrive at the point where the principal is only 20% of the initial amount borrowed, it's necessary to know how your home has appreciated in value. After all, any appreciation you've acquired over the years counts towards abolishing PMI. So why pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not be reflecting the national trends and/or your home could have gained equity before things simmered down, so even when nationwide trends hint at plunging home values, you should understand that real estate is local. The hardest thing for almost all homeowners to understand is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can definitely help. It is an appraiser's job to know the market dynamics of their area. At California Home Appraisal, we're masters at pinpointing value trends in San Pedro, Los Angeles County and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will usually remove the PMI with little trouble. At that time, the homeowner can enjoy the savings from that point on.
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