Have equity in your home? Want a lower payment? An appraisal from Ellen Louise Fowler can help you get rid of your PMI.When buying a house, a 20% down payment is usually the standard. The lender's risk is often only the remainder between the home value and the amount due on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and natural value fluctuations on the chance that a borrower is unable to pay. Banks were accepting down payments down to 10, 5 and often 0 percent in the peak of last decade's mortgage boom. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI protects the lender in case a borrower is unable to pay on the loan and the value of the house is less than the loan balance. Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. It's profitable for the lender because they secure the money, and they get paid if the borrower defaults, 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 refrain from bearing the cost of PMI?The Homeowners Protection Act of 1998 makes the lenders on most loans to automatically terminate 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 homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, wise homeowners can get off the hook ahead of time. Because it can take many years to reach the point where the principal is only 20% of the initial amount borrowed, it's important to know how your home has appreciated in value. After all, all of the appreciation you've gained over the years counts towards abolishing PMI. So why should you pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not be reflecting the national trends and/or your home might have gained equity before things simmered down, so even when nationwide trends hint at decreasing home values, you should understand that real estate is local. The difficult thing for most home owners to know is just when their home's equity rises above the 20% point. A certified, licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Ellen Louise Fowler , we're experts at recognizing value trends in Valencia, 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 often do away with the PMI with little trouble. At which time, the homeowner can delight in the savings from that point on.
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