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

When purchasing a home, a 20% down payment is usually the standard. The lender's only liability is usually just the remainder between the home value and the amount due on the loan, so the 20% adds a nice cushion against the expenses of foreclosure, selling the home again, and natural value changes in the event a purchaser doesn't pay.

Lenders were taking down payments as low as 10, 5 and even 0 percent in the peak of last decade's mortgage boom. How does a lender manage the additional risk of the low down payment? The answer is Private Mortgage Insurance or PMI. This supplementary plan covers the lender if 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.

Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage monthly payment and often isn't even tax deductible, PMI can be pricey to a borrower. Instead of a piggyback loan where the lender takes in all the deficits, PMI is advantageous for the lender because they acquire the money, and they get the money if the borrower is unable to pay.


The money you keep from dropping the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Allatoona Appraisal when it comes to appreciating values in the city of Kennesaw and Cobb County. Contact us today.

How homebuyers can avoid bearing the expense of PMI

With the implementation of The Homeowners Protection Act of 1998, lenders are required to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the primary loan amount on nearly all loans. Acute homeowners can get off the hook a little early. The law stipulates 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 reach the point where the principal is just 80% of the original amount of the loan, so it's crucial to know how your Georgia home has increased in value. After all, any appreciation you've gained over time counts towards dismissing PMI. So why pay it after the balance of your loan has dropped below the 80% mark? Your neighborhood might not adhere to national trends and/or your home might have gained equity before the economy cooled off. So even when nationwide trends indicate declining home values, you should realize that real estate is local.

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


The money you keep from dropping the PMI required when you got your mortgage will make up for the price of the appraisal in no time. Allatoona Appraisal is in the business of tracking real estate value trends 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