Have equity in your home? Want a lower payment? An appraisal from WalshStreet Appraisals can help you get rid of your PMI.

A 20% down payment is typically the standard when getting a mortgage. Since the risk for the lender is generally only the remainder between the home value and the sum remaining on the loan, the 20% adds a nice cushion against the costs of foreclosure, reselling the home, and regular value fluctuations in the event a purchaser is unable to pay.

During the recent mortgage upturn that our country recently experienced, it became customary to see lenders reducing down payments to 10, 5 or sometimes 0 percent. A lender is able to handle the added risk of the reduced down payment with Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower defaults on the loan and the value of the home is less than what is owed on the loan.

Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and on many occasions isn't even tax deductible, PMI can be costly to a borrower. It's money-making for the lender because they secure the money, and they receive payment if the borrower defaults, unlike a piggyback loan where the lender absorbs all the losses.

The money you keep from cancelling your PMI will make up for the cost of the appraisal in no time. WalshStreet Appraisals are experts when it comes to value trends in the city of Los Angeles and Los Angeles County. Contact us today.

How can home owners refrain from bearing the expense of PMI?

As a result of The Homeowners Protection Act of 1998, lenders are obligated to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the initial loan amount on nearly all loans. Smart homeowners can get off the hook ahead of time. The law guarantees that, upon request of the home owner, the PMI must be dropped when the principal amount equals only 80 percent.

Because it can take several years to arrive at the point where the principal is just 80% of the initial amount of the loan, it's necessary to know how your California home has appreciated in value. After all, all of the appreciation you've acquired over the years counts towards removing PMI. So why should you pay it after the balance of your loan has dropped below the 80% threshold? Your neighborhood might not follow national trends and/or your home may have acquired equity before the economy simmered down. So even when nationwide trends predict decreasing home values, you should know most importantly that real estate is local.

The difficult thing for most homeowners to figure out is whether their home equity has exceeded the 20% point. A certified, California licensed real estate appraiser can certainly help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At WalshStreet Appraisals, we're masters at analyzing value trends in Los Angeles, 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 do away with the PMI with little anxiety. At that time, the homeowner can delight in the savings from that point on.

Has your home value appreciated since you first purchased? Contact WalshStreet Appraisals today at 323-936-9970. You may be able to cancel your Private Mortgage Insurance premium.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year