Let Allatoona Appraisal help you figure out if you can cancel your PMI

A 20% down payment is typically accepted when getting a mortgage. The lender's liability is oftentimes only the remainder between the home value and the balance remaining on the loan, so the 20% supplies a nice cushion 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 as low as 10, 5 and frequently 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the additional risk of the reduced down payment with Private Mortgage Insurance or PMI. This supplementary plan takes care of the lender if a borrower defaults on the loan and the market price of the home is lower than what is owed on the loan.

PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible. It's advantageous for the lender because they collect the money, and they get paid if the borrower doesn't pay, in contrast to a piggyback loan where the lender consumes all the costs.


Has your home value appreciated since you first purchased? Call Allatoona Appraisal today at 678-574-0222 to see if you can cancel your Private Mortgage Insurance premium.

How home owners can keep from bearing the cost of PMI

The Homeowners Protection Act of 1998 obligates the lenders on the majority of loans to automatically eliminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. The law states that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent. So, wise home owners can get off the hook sooner than expected.

Since it can take several years to arrive at the point where the principal is just 80% of the initial loan amount, it's crucial to know how your Georgia home has increased in value. After all, any appreciation you've achieved over time counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Even when nationwide trends predict declining home values, understand that real estate is local. Your neighborhood may not be reflecting the national trends and/or your home may have secured equity before things simmered down.

The hardest thing for almost all homeowners to figure out is whether their home equity has exceeded the 20% point. An accredited, Georgia licensed real estate appraiser can definitely 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 experts at analyzing value trends in Kennesaw, Cobb County, and surrounding areas. Faced with data from an appraiser, the mortgage company will generally drop the PMI with little trouble. At that time, the homeowner can enjoy the savings from that point on.


Does your monthly house payment include a fee for PMI? Call Allatoona Appraisal today at 678-574-0222 or send us an e-mail. A current appraisal 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