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 usually accepted when purchasing a home. The lender's only risk is often just the remainder between the home value and the sum outstanding on the loan, so the 20% supplies a nice cushion against the expenses of foreclosure, selling the home again, and typical value variations on the chance that a purchaser doesn't pay.

The market was working with down payments dropping to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. How does a lender endure the increased risk of the small down payment? The solution is Private Mortgage Insurance or PMI. PMI guards the lender in the event a borrower defaults on the loan and the value of the house is less than the balance of the loan.

PMI is costly to a borrower in that the $40-$50 a month per $100,000 borrowed is bundled into the mortgage payment and on many occasions isn't even tax deductible. It's lucrative for the lender because they collect the money, and they get paid if the borrower doesn't pay, separate from a piggyback loan where the lender absorbs all the losses.


Does your monthly loan payment include a fee PMI? Call Allatoona Appraisal today at 678-574-0222 or send us an e-mail. Documentation of your home's current value could save you thousands.

How can home buyers keep from bearing the cost of PMI?

The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. The law stipulates that, at the request of the home owner, the PMI must be released when the principal amount equals just 80 percent. So, savvy home owners can get off the hook a little early.

Considering it can take many years to reach the point where the principal is only 80% of the original amount borrowed, it's important to know how your Georgia home has grown in value. After all, any appreciation you've achieved over the years counts towards dismissing PMI. So what's the reason for paying it after the balance of your loan has dropped below the 80% mark? Your neighborhood may not conform to national trends and/or your home could have gained equity before things cooled off. So even when nationwide trends predict falling home values, you should know most importantly that real estate is local.

An accredited, Georgia licensed real estate appraiser can help home owners figure out just when their home's equity rises above the 20% point, as it's a hard thing to know. It is an appraiser's job to recognize the market dynamics of their area. At Allatoona Appraisal, we're experts at determining 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 remove the PMI with little trouble. At which time, the home owner can retain the savings from that point on.


The savings from dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Allatoona Appraisal has years of experience with real estate value trends 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