Have equity in your home? Want a lower payment? An appraisal from All City Appraisal can help you get rid of your PMI.When purchasing a home, a 20% down payment is usually the standard. The lender's risk is often only the difference between the home value and the sum remaining on the loan, so the 20% provides a nice buffer against the costs of foreclosure, selling the home again, and natural value fluctuations on the chance that a borrower defaults. Banks were taking down payments as low as 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender endure the increased risk of the low down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the value of the house is less than the balance of the loan. Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be costly to a borrower. It's advantageous for the lender because they collect the money, and they get paid if the borrower is unable to pay, contradictory to a piggyback loan where the lender consumes all the losses. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can home owners prevent bearing the expense of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law stipulates that, at the request of the home owner, the PMI must be abandoned when the principal amount reaches only 80 percent. So, keen homeowners can get off the hook sooner than expected. Considering it can take countless years to reach the point where the principal is just 20% of the initial amount borrowed, it's crucial to know how your home has increased in value. After all, any appreciation you've acquired over time counts towards removing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be following the national trends and/or your home may have secured equity before things calmed down, so even when nationwide trends hint at plummeting home values, you should realize that real estate is local. The hardest thing for many 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 keep up with the market dynamics of our area. At All City Appraisal, we're masters at identifying value trends in Woodland Hills, 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 anxiety. At that time, the home owner can delight in the savings from that point on.
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