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 risk is oftentimes only the difference between the home value and the amount due on the loan, so the 20% supplies a nice cushion against the charges of foreclosure, selling the home again, and typical value changes on the chance that a purchaser doesn't pay.

The market was working with down payments as low as 10, 5 and frequently 0 percent in the peak of last decade's mortgage boom. A lender is able to manage the additional risk of the small down payment with Private Mortgage Insurance or PMI. This supplementary policy covers the lender in the event a borrower doesn't pay on the loan and the market price of the property is lower than what is owed on the loan.

PMI is costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and often isn't even tax deductible. It's money-making for the lender because they secure the money, and they get the money if the borrower defaults, in contrast to a piggyback loan where the lender absorbs all the deficits.

The savings 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 a homebuyer avoid bearing the cost of PMI?

The Homeowners Protection Act of 1998 forces the lenders on the majority of loans to automatically terminate the PMI when the principal balance of the loan reaches 78 percent of the primary loan amount. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount equals just 80 percent. So, keen homeowners can get off the hook ahead of time.

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

The difficult thing for many consumers to figure out is whether their home equity has exceeded the 20% point. A certified, Georgia licensed real estate appraiser can certainly 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 recognizing value trends in Kennesaw, Cobb County, and surrounding areas. Faced with data from an appraiser, the mortgage company will often remove the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.

The money you keep from getting rid of your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Allatoona Appraisal when it comes to appreciating values 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