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

It's widely inferred that a 20% down payment is accepted when getting a mortgage. The lender's only risk is typically just the remainder between the home value and the amount remaining on the loan, so the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and natural value changes in the event a borrower defaults.

During the recent mortgage boom of the mid 2000s, it was common to see lenders making deals with down payments of 10, 5 or often 0 percent. How does a lender endure the additional risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy covers the lender in the event a borrower defaults on the loan and the market price of the house is less than what the borrower still owes on the loan.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and often isn't even tax deductible, PMI can be expensive to a borrower. Separate from a piggyback loan where the lender absorbs all the deficits, PMI is money-making for the lender because they acquire the money, and they get the money if the borrower doesn't pay.

Did you have less than 20% to put down on your mortgage? Contact Allatoona Appraisal today at 678-574-0222. You may be able to get rid of your Private Mortgage Insurance premium.

How can a homeowner refrain from bearing the expense of PMI?

The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically cease the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Keen homeowners can get off the hook sooner than expected. The law guarantees that, upon request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent.

It can take many years to arrive at the point where the principal is just 80% of the original loan amount, so it's important to know how your Georgia home has grown in value. After all, all of the appreciation you've acquired over the years counts towards abolishing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Your neighborhood may not follow national trends and/or your home could have secured equity before things declined. So even when nationwide trends signify a reduction in home values, you should know most importantly that real estate is local.

An accredited, Georgia licensed real estate appraiser can help homeowners figure out just when their home's equity goes over the 20% point, as it's a difficult thing to know. It is an appraiser's job to understand the market dynamics of their area. At Allatoona Appraisal, we're masters at recognizing value trends in Kennesaw, Cobb County, and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will most often remove the PMI with little effort. At that time, the home owner can delight in the savings from that point on.

Is PMI a lineitem in your monthly mortgage payment? Call Allatoona Appraisal today at 678-574-0222 or send us an e-mail. A new appraisal could save you thousands.

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