Assuming a decent credit rating, any potential home buyer can secure a loan for a house. Why? Because these transactions are secured by a very valuable asset: the home itself.

In recent years, however, it has become increasingly more common to see home buyers using down payments of 10, 5 or even 0 percent. To offset this risk, these transactions often require Private Mortgage Insurance or PMI. This protects the lender in case a borrower defaults on the loan.

Until recently lenders were under no obligation to tell home owners when they had reached a point where the PMI can be dropped. That all changed in 1999, when the Homeowners Protection Act took effect. Savvy homeowners can now get off the hook a little earlier. The law stipulates that, upon request of the home owner, the PMI must be dropped when the principal amount reaches only 80 percent!

The hardest thing for most home owners to know is just when does their home equity rise above this magical 20 percent point? Bayview Appraisal Associates can certainly help. We know when property values have risen or declined offer specific services to help customers find the value of their homes and remove PMI payments. The savings from dropping the PMI pays for the appraisal in a matter of months.

For more information on PMI and the Homeowners Protection Act, try one of these links:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year

Private Mortgage Insurance (PMI): Law Requires Lenders to Cancel PMI