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

When buying a house, a 20% down payment is usually the standard. Considering the risk for the lender is generally only the remainder between the home value and the sum remaining on the loan, the 20% adds a nice buffer against the expenses of foreclosure, selling the home again, and regular value fluctuations in the event a purchaser doesn't pay.

The market was accepting down payments dropping to 10, 5 and often 0 percent during the mortgage boom of the last decade. A lender is able to endure the additional risk of the low down payment with Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower doesn't pay on the loan and the value of the property is less than the balance of the loan.

Because the $40-$50 a month per $100,000 borrowed is compiled into the mortgage payment and many times isn't even tax deductible, PMI is costly to a borrower. It's money-making for the lender because they collect the money, and they are covered if the borrower is unable to pay, unlike a piggyback loan where the lender takes in all the costs.


The savings from getting rid of your PMI will make up for the cost of the appraisal in a matter of months. 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 can home buyers refrain from bearing the expense of PMI?

The Homeowners Protection Act of 1998 makes the lenders on the majority of loans to automatically cancel the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. Acute homeowners can get off the hook beforehand. The law states that, at the request of the home owner, the PMI must be abandoned when the principal amount equals just 80 percent.

Since it can take a significant number of years to reach the point where the principal is only 80% of the original loan amount, it's necessary to know how your Georgia home has increased in value. After all, any appreciation you've accomplished over the years counts towards removing PMI. So what's the reason for paying it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not follow national trends and/or your home could have gained equity before the economy cooled off. So even when nationwide trends predict decreasing home values, you should realize that real estate is local.

A certified, Georgia licensed real estate appraiser can help homeowners figure out if their equity has made it to the 20% point, as it's a difficult thing to know. It is an appraiser's job to understand 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 figures from an appraiser, the mortgage company will usually remove the PMI with little effort. At that time, the homeowner can relish the savings from that point on.


The savings from getting rid of your PMI will make up for the cost of the appraisal in a matter of months. 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

 


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