Allatoona Appraisal can help you remove your Private Mortgage Insurance

When purchasing a home, a 20% down payment is usually the standard. Because the liability for the lender is often only the difference between the home value and the amount outstanding on the loan, the 20% provides a nice buffer against the expenses of foreclosure, selling the home again, and typical value changes on the chance that a borrower defaults.

The market was working with down payments discounted to 10, 5 and even 0 percent during the mortgage boom of the mid 2000s. A lender is able to handle the added risk of the small down payment with Private Mortgage Insurance or PMI. PMI guards the lender if a borrower doesn't pay on the loan and the value of the home is less than what the borrower still owes on the loan.

PMI can be costly to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is lumped into the mortgage payment and frequently isn't even tax deductible. It's advantageous for the lender because they collect the money, and they get paid if the borrower defaults, separate from a piggyback loan where the lender absorbs all the losses.


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

How can buyers refrain from bearing the expense of PMI?

The Homeowners Protection Act of 1998 forces the lenders on most loans to automatically cancel the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law promises that, upon request of the homeowner, the PMI must be released when the principal amount reaches just 80 percent. So, savvy home owners can get off the hook sooner than expected.

Considering it can take many years to get to the point where the principal is just 80% of the original loan amount, it's important to know how your Georgia home has increased in value. After all, any appreciation you've obtained over the years counts towards removing PMI. So what's the reason for paying it after your loan balance has fallen below the 80% threshold? Even when nationwide trends indicate decreasing home values, be aware that real estate is local. Your neighborhood might not be minding the national trends and/or your home could have gained equity before things cooled off.

The hardest thing for almost all homeowners to determine is just when their home's equity rises above the 20% point. An accredited, Georgia licensed real estate appraiser can definitely help. As appraisers, it's our job to know the market dynamics of our area. At Allatoona Appraisal, we're masters at identifying value trends in Kennesaw, Cobb County, and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will generally eliminate the PMI with little anxiety. At which time, the home owner can relish the savings from that point on.


Did you have less than 20% to put down on your mortgage? Call Allatoona Appraisal today at 678-574-0222 to see if you can save money by removing your Private Mortgage Insurance payment.

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