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

When buying a house, a 20% down payment is usually the standard. The lender's only exposure is generally just the difference between the home value and the balance outstanding on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and regular value variations on the chance that a borrower doesn't pay.

The market was accepting down payments as low as 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. A lender is able to handle the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This additional plan guards the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than what is owed on the loan.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and on many occasions isn't even tax deductible, PMI can be costly to a borrower. It's beneficial for the lender because they secure the money, and they get paid if the borrower defaults, different from a piggyback loan where the lender takes in all the costs.


Did you have less than 20% to put down on your mortgage? Contact Allatoona Appraisal today at 678-574-0222 to see if you can cancel your Private Mortgage Insurance premium.

How can buyers prevent bearing the cost of PMI?

As a result of The Homeowners Protection Act of 1998, lenders are forced to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount on nearly all loans. The law states that, upon request of the home owner, the PMI must be released when the principal amount reaches only 80 percent. So, keen home owners can get off the hook sooner than expected.

It can take a significant number of years to arrive at the point where the principal is only 80% of the initial amount borrowed, so it's crucial to know how your Georgia home has appreciated in value. After all, any appreciation you've obtained over the years counts towards removing PMI. So why pay it after your loan balance has fallen below the 80% threshold? Even when nationwide trends signify falling home values, be aware that real estate is local. Your neighborhood might not be adopting the national trends and/or your home may have secured equity before things simmered down.

The hardest thing for most consumers to figure out is whether their home equity has exceeded the 20% point. An accredited, Georgia licensed real estate appraiser can surely help. As appraisers, it's our job to understand the market dynamics of our area. At Allatoona Appraisal, we're masters at identifying value trends in Kennesaw, Cobb County, and surrounding areas, and we know when property values have risen or declined. When faced with figures from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the homeowner can retain the savings from that point on.


The savings from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than Allatoona Appraisal when it comes to appreciating values in Kennesaw and Cobb County. Contact us today.

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