Allatoona Appraisal can help you remove your Private Mortgage Insurance

It's largely understood that a 20% down payment is the standard when getting a mortgage. Because the liability for the lender is oftentimes only the difference between the home value and the amount due on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and regular value variations in the event a purchaser defaults.

During the recent mortgage upturn of the mid 2000s, it became customary to see lenders reducing down payments to 10, 5, 3 or sometimes 0 percent. A lender is able to endure the increased risk of the low down payment with Private Mortgage Insurance or PMI. This added policy takes care of the lender if a borrower doesn't pay on the loan and the value of the property is less than what the borrower still owes on the loan.

PMI is pricey to a borrower because the $40-$50 a month per $100,000 borrowed is bundled into the mortgage monthly payment and on many occasions isn't even tax deductible. Unlike a piggyback loan where the lender consumes all the deficits, PMI is lucrative for the lender because they obtain the money, and they are covered if the borrower doesn't pay.


The savings from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. 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 homeowners can 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 reaches 78 percent of the beginning loan amount. The law states that, at the request of the home owner, the PMI must be abandoned when the principal amount equals only 80 percent. So, wise homeowners can get off the hook sooner than expected.

Since it can take a significant number of years to arrive at the point where the principal is just 80% of the original amount of the loan, it's necessary to know how your Georgia home has increased in value. After all, every bit of appreciation you've acquired 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 follow national trends and/or your home might have acquired equity before things simmered down. So even when nationwide trends indicate decreasing home values, you should realize that real estate is local.

The hardest thing for almost all homeowners to figure out is just when their home's equity goes over the 20% point. A certified, Georgia licensed real estate appraiser can surely help. As appraisers, it's our job to keep up with the market dynamics of our area. At Allatoona Appraisal, we know when property values have risen or declined. We're masters at recognizing value trends in Kennesaw, Cobb County, and surrounding areas. Faced with figures from an appraiser, the mortgage company will generally cancel the PMI with little trouble. At which time, the home owner can retain the savings from that point on.


Does your monthly loan payment include a fee 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