Have equity in your home? Want a lower payment? An appraisal from Independent Appraisal can help you get rid of your PMI.When getting a mortgage, a 20% down payment is usually the standard. The lender's risk is oftentimes only the difference between the home value and the sum outstanding on the loan, so the 20% supplies a nice buffer against the expenses of foreclosure, reselling the home, and regular value changes on the chance that a purchaser doesn't pay. The market was accepting down payments down to 10, 5 and often 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the increased risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower doesn't pay on the loan and the market price of the house is lower than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and generally isn't even tax deductible, PMI is costly to a borrower. It's profitable for the lender because they obtain the money, and they get paid if the borrower doesn't pay, contradictory to a piggyback loan where the lender takes in all the costs. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can a home buyer refrain from bearing the cost of PMI?With the employment of The Homeowners Protection Act of 1998, on nearly all loans lenders are forced to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law promises that, at the request of the homeowner, the PMI must be dropped when the principal amount equals just 80 percent. So, savvy home owners can get off the hook sooner than expected. It can take many years to get to the point where the principal is just 20% of the original loan amount, so it's necessary to know how your home has grown in value. After all, any appreciation you've gained over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Your neighborhood may not be adhering to the national trends and/or your home could have acquired equity before things simmered down, so even when nationwide trends indicate plummeting home values, you should understand that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity rises above the 20% point, as it's a tough thing to know. It is an appraiser's job to understand the market dynamics of their area. At Independent Appraisal, we're experts at analyzing value trends in Hermosa Beach, 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 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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