Are you looking for a way to stop paying PMI charges alongside the repayment of your home loan? If so, PMI removal appraisals are just what you are looking for. Private Mortgage Insurance or PMI is something every homeowner hates and for good reason. This insurance puts a charge on the borrower for an insurance policy that is meant to defend the lender.

The PMI tries to protect the lender from any loss that they may face if the borrower defaults on their mortgage loan payments. The charges for this insurance are added to the borrower’s loan amount, and these charges are not tax deductible. Because of this, every homeowner tries to get rid of this extra charge as soon as possible.

So, let us look at how PMI removal appraisals help to remove PMI in the U.S.

How Is PMI Appraisal Performed?

The main objective of an appraiser in this situation is to provide a precise figure that represents the home’s current market value. This is important because in order to qualify for PMI removal from your mortgage, you need to have an appropriate amount of equity in your home in comparison to its actual value.

PMI removal appraisal can only be done by a professional home appraiser. To evaluate your home’s value, a professional appraiser will take several factors into consideration which include:

  • The market value of other surrounding properties
  • Changes in market trends since the initial purchase
  • Condition of the home and depreciation value

After considering all of these factors, a professional PMI removal appraiser will provide the estimated value to the lender, who will make the final decision on the appraisal.

Criteria for Removal of PMI

In the U.S., the rules for removing PMI may be different if your lender has specific terms and figures preset during the contract. However, in most cases, a homeowner must have at least 20% equity in their homes to qualify for a successful PMI removal.

This is where PMI removal appraisal services are important as the value of a house may change depending on the market conditions. Their service can confirm if you have already paid the appropriate amount to justify the removal of the PMI charge from your loan.

What If PMI Removal Appraisal Fails?

If the balance of your loan mortgage is calculated to be above 80% of the home’s value from the figure provided by the PMI removal appraiser, you won’t be able to remove the charge of PMI from your loan, but you can try again at a later date when you feel that you have paid enough of your loan balance.

Conclusion

PMI charge is a burdensome expense that every homeowner wishes to get removed as soon as possible. So, if you are in search of a PMI removal appraisal service provider, contact Sacramento Valley Appraisal today.

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