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

A 20% down payment is typically accepted when buying a house. Considering the liability for the lender is usually only the remainder between the home value and the sum due on the loan, the 20% supplies a nice buffer against the expenses of foreclosure, selling the home again, and regular value changes on the chance that a purchaser defaults.

Banks were working with 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 handle the additional risk of the minimal down payment with Private Mortgage Insurance or PMI. This additional plan covers the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than what is owed on the loan.

PMI can be pricey to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and oftentimes isn't even tax deductible. It's lucrative for the lender because they collect the money, and they get paid if the borrower is unable to pay, separate from a piggyback loan where the lender consumes all the deficits.


Does your monthly house payment have a lineitem for PMI? Call Allatoona Appraisal today at 678-574-0222 or send us an e-mail. A recent appraisal could save you thousands.

How can a home owner prevent paying PMI?

The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. Wise home owners can get off the hook a little early. The law designates that, at the request of the home owner, the PMI must be dropped when the principal amount reaches just 80 percent.

Since it can take several years to arrive at the point where the principal is only 80% of the initial amount borrowed, it's necessary to know how your Georgia home has grown in value. After all, every bit of appreciation you've achieved over time counts towards dismissing PMI. So what's the reason for paying it after your loan balance has dropped below the 80% threshold? Your neighborhood might not adhere to national trends and/or your home may have secured equity before things cooled off. So even when nationwide trends hint at decreasing home values, you should realize that real estate is local.

The hardest thing for most homeowners to determine is just when their home's equity rises above the 20% point. A certified, Georgia licensed real estate appraiser can definitely help. It's an appraiser's job to know the market dynamics of their area. At Allatoona Appraisal, we're masters at recognizing 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 that time, the home owner can relish the savings from that point on.


Does your monthly loan 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 present 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