Have equity in your home? Want a lower payment? An appraisal from Independent Appraisal can help you get rid of your PMI.A 20% down payment is usually accepted when buying a house. The lender's risk is usually only the remainder between the home value and the sum outstanding on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, selling the home again, and regular value fluctuations in the event a purchaser doesn't pay. During the recent mortgage upturn of the last decade, it became widespread to see lenders requiring down payments of 10, 5 or sometimes 0 percent. How does a lender manage the added risk of the low down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender if a borrower is unable to pay on the loan and the market price of the home is less than what is owed on the loan. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and generally isn't even tax deductible, PMI is pricey to a borrower. It's favorable for the lender because they acquire the money, and they get the money if the borrower is unable to pay, unlike 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 homebuyer prevent bearing the cost of PMI?The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount. The law guarantees that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent. So, wise homeowners can get off the hook sooner than expected. It can take countless years to arrive at the point where the principal is only 20% of the original loan amount, so it's important to know how your home has appreciated in value. After all, all of the appreciation you've achieved over time counts towards abolishing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Your neighborhood may not be adopting the national trends and/or your home may have gained equity before things cooled off, so even when nationwide trends signify decreasing home values, you should realize that real estate is local. An accredited, licensed real estate appraiser can help homeowners understand just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to keep up with the market dynamics of their area. At Independent Appraisal, we're experts at recognizing value trends in Hermosa Beach, Los Angeles County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will usually eliminate the PMI with little trouble. At that time, the home owner can enjoy the savings from that point on.
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