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

It's generally understood that a 20% down payment is accepted when getting a mortgage. Because the risk for the lender is often only the remainder between the home value and the amount due on the loan, the 20% supplies a nice buffer against the costs of foreclosure, reselling the home, and natural value changes on the chance that a borrower doesn't pay.

The market was working with down payments dropping to 10, 5 and even 0 percent in the peak of last decade's mortgage boom. A lender is able to endure the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplementary policy takes care of the lender in case a borrower is unable to pay on the loan and the market price of the property is less than the balance of the loan.

Since the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and frequently isn't even tax deductible, PMI is costly to a borrower. As opposed to a piggyback loan where the lender consumes all the losses, PMI is lucrative for the lender because they acquire the money, and they get the money if the borrower doesn't pay.


Has your real estate appreciated since you first purchased? Call Allatoona Appraisal today at 678-574-0222. You may be able to get rid of your Private Mortgage Insurance premium.

How can a home owner avoid bearing the expense of PMI?

The Homeowners Protection Act of 1998 obligates the lenders on nearly all loans to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. Acute home owners can get off the hook ahead of time. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent.

It can take many years to arrive at the point where the principal is just 80% of the original amount of the loan, so it's essential to know how your Georgia home has grown in value. After all, all of the appreciation you've gained over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% mark? Even when nationwide trends forecast falling home values, be aware that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home might have acquired equity before things simmered down.

The difficult thing for most homeowners to determine is whether their home equity has exceeded the 20% point. A certified, Georgia licensed real estate appraiser can certainly help. As appraisers, it's our job to recognize the market dynamics of our area. At Allatoona Appraisal, we know when property values have risen or declined. We're masters at recognizing value trends in Kennesaw, Cobb County, and surrounding areas. When faced with data from an appraiser, the mortgage company will often eliminate the PMI with little anxiety. At that time, the home owner can enjoy 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 payment.

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