Allatoona Appraisal can help you remove your Private Mortgage Insurance

A 20% down payment is typically accepted when buying a house. The lender's risk is oftentimes only the difference between the home value and the balance due on the loan, so the 20% adds a nice cushion against the costs of foreclosure, selling the home again, and natural value changes on the chance that a purchaser doesn't pay.

During the recent mortgage boom of the mid 2000s, it was customary to see lenders making deals with down payments of 10, 5 or often 0 percent. How does a lender handle the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI takes care of the lender in case a borrower doesn't pay on the loan and the value of the property is lower than the loan balance.

Because the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and many times isn't even tax deductible, PMI can be costly to a borrower. Instead of a piggyback loan where the lender consumes all the deficits, PMI is favorable for the lender because they acquire the money, and they get paid if the borrower defaults.


The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Allatoona Appraisal are experts when it comes to value trends in the city of Kennesaw and Cobb County. Contact us today.

How homeowners can avoid bearing the cost of PMI

As a result of The Homeowners Protection Act of 1998, lenders are obligated to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the beginning loan amount on most loans. The law guarantees that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, keen home owners can get off the hook ahead of time.

Since it can take a significant number of years to get to the point where the principal is only 80% of the original amount borrowed, it's necessary to know how your Georgia home has appreciated in value. After all, every bit of appreciation you've acquired over the years counts towards dismissing PMI. So why pay it after your loan balance has fallen below the 80% mark? Your neighborhood may not conform to national trends and/or your home might have secured equity before things declined. So even when nationwide trends signify a reduction in home values, you should understand that real estate is local.

The toughest thing for many consumers to determine is just when their home's equity goes over the 20% point. An accredited, Georgia licensed real estate appraiser can surely help. Market dynamics and neighborhood-specific pricing trends are an appraiser's primary job! At Allatoona Appraisal, we know when property values have risen or declined. We're masters at pinpointing value trends in Kennesaw, Cobb County, and surrounding areas. When faced with data from an appraiser, the mortgage company will most often drop the PMI with little effort. At which time, the home owner can relish the savings from that point on.


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 cancel your Private Mortgage Insurance premium.

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