Let Allatoona Appraisal help you discover if you can eliminate your PMI

It's generally inferred that a 20% down payment is accepted when purchasing a home. Considering the risk for the lender is generally only the difference between the home value and the sum remaining on the loan, the 20% supplies a nice cushion against the charges of foreclosure, reselling the home, and natural value fluctuations in the event a purchaser is unable to pay.

The market was accepting down payments as low as 10, 5 and frequently 0 percent during the mortgage boom of the mid 2000s. How does a lender manage the added risk of the small down payment? The solution is Private Mortgage Insurance or PMI. This supplemental policy guards the lender in the event a borrower doesn't pay on the loan and the market price of the property is less than what the borrower still owes on the loan.

Because the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and frequently isn't even tax deductible, PMI can be expensive to a borrower. It's lucrative for the lender because they secure the money, and they receive payment if the borrower is unable to pay, in contrast to a piggyback loan where the lender consumes all the damages.


The amount you keep from getting rid of your PMI pays for the appraisal in no time. Allatoona Appraisal has years of experience with value trends in the city of Kennesaw and Cobb County. Contact us today.

How can homeowners keep from bearing the cost of PMI?

With the implementation of The Homeowners Protection Act of 1998, lenders are obligated to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the initial loan amount on most loans. Wise home owners can get off the hook a little early. The law stipulates that, at the request of the homeowner, the PMI must be dropped when the principal amount reaches just 80 percent.

It can take many years to reach the point where the principal is only 80% of the initial loan amount, so it's crucial to know how your Georgia home has increased in value. After all, all of the appreciation you've achieved over the years counts towards dismissing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Even when nationwide trends forecast declining home values, understand that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home could have secured equity before things simmered down.

An accredited, Georgia licensed real estate appraiser can help homeowners figure out if their equity has exceeed the 20% point, as it's a hard thing to know. 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 recognizing value trends in Kennesaw, Cobb County, and surrounding areas. Faced with data from an appraiser, the mortgage company will often cancel the PMI with little anxiety. At that time, the home owner can enjoy the savings from that point on.


Did you secure your mortgage with less than 20% down? Contact Allatoona Appraisal today at 678-574-0222 to see if you can 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