Let Allatoona Appraisal help you discover if you can get rid of your PMI

It's typically inferred that a 20% down payment is common when buying a house. The lender's only exposure is often just the difference between the home value and the amount outstanding on the loan, so the 20% adds a nice buffer against the expenses of foreclosure, reselling the home, and natural value changes on the chance that a purchaser is unable to pay.

Lenders were taking down payments as low as 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 low down payment with Private Mortgage Insurance or PMI. This supplementary policy protects the lender if a borrower defaults on the loan and the value of the home is less than what the borrower still owes on the loan.

PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and oftentimes isn't even tax deductible. Separate from a piggyback loan where the lender consumes all the costs, PMI is beneficial for the lender because they secure the money, and they get the money if the borrower is unable to pay.


The amount you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Allatoona Appraisal has years of experience with value trends in the city of Kennesaw and Cobb County. Contact us today.

How can a homebuyer refrain from bearing the expense of PMI?

With the implementation of The Homeowners Protection Act of 1998, lenders are required to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the initial loan amount on nearly all loans. Keen homeowners can get off the hook beforehand. The law guarantees that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent.

It can take several years to get to the point where the principal is just 80% of the original loan amount, so it's important to know how your Georgia home has increased in value. After all, every bit of appreciation you've obtained over the years counts towards dismissing PMI. So why pay it after your loan balance has dropped below the 80% threshold? Even when nationwide trends forecast decreasing home values, be aware that real estate is local. Your neighborhood may not be following the national trends and/or your home might have secured equity before things declined.

The hardest thing for most consumers to determine is just when their home's equity goes over the 20% point. A certified, Georgia licensed real estate appraiser can surely help. It is an appraiser's job to understand the market dynamics of their area. At Allatoona Appraisal, we're masters at pinpointing value trends in Kennesaw, Cobb County, and surrounding areas, and we know when property values have risen or declined. Faced with figures from an appraiser, the mortgage company will often cancel the PMI with little effort. At which time, the home owner can enjoy the savings from that point on.


Does your monthly house payment have a lineitem for PMI? Call Allatoona Appraisal today at 678-574-0222 or send us an e-mail. Documentation of your home's current value could save you thousands.

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