IS IT TIME TO STOP PAYING FOR PMI?
Carrying Private Mortgage Insurance (PMI) allows you to purchase your property with a lower down payment, but that doesn’t mean you need to continue paying it for the life of the loan. PMI is a monthly escrow payment that you could instead keep in your own bank account. While it's easy to routinely pay your mortgage without thinking about the details, you might be able to reduce your monthly payment by eliminating the PMI portion. You may be paying for insurance that is no longer necessary.
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PROVE YOUR EQUITY WITH A PMI REMOVAL APPRAISAL
The Homeowners Protection Act (HPA) mandates that servicing lenders notify homeowners if they are paying PMI as part of their mortgage payments and outline the conditions for PMI cancellation. In most cases, providing proof of equity can be done through a state-certified real estate appraisal. Even if you haven’t received notification, you can still initiate the process yourself by ordering an appraisal. Once you confirm that you have 20% equity, you can cancel your PMI with a single letter.
WHEN IS PMI NEEDED?
Many homeowners don’t realize that they can stop making PMI payments once they reach a certain level of equity in their home’s value. In California, PMI is no longer required once you have 20% equity, either through paying down the principal or an increase in the home's value. This can also be influenced by home improvements or additions. Once this equity level is achieved, the property value sufficiently secures the loan, allowing you to cancel the PMI policy. To do this, you need to request the cancellation in writing and provide proof to your lender that you have more than 20% equity in the property.
GET A LOWER PAYMENT STARTING TODAY
PMI helped you purchase your home when you needed it, but there comes a time when these payments are no longer beneficial. Eliminating this expense can free up funds for other purposes, such as home maintenance or future investments. KO Appraisal is here to help you stop unnecessary PMI payments. Our appraisal services in California can provide the proof you need to cancel your PMI.
Contact us today for a free appraisal quote and take the first step toward reducing your monthly mortgage payment.
CONTACT OUR TEAM
For more information about our appraisal services, please contact us or call us at 760-685-8036. We are committed to helping you navigate the appraisal process with ease and accuracy.
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