Why It Pays to Check Out Lender-Paid Mortgage Insurance

By
Mortgage and Lending with Big Valley Mortgage NMLS#220931, DRE#00899544

Mi2

Mortgage insurance, or PMI, has had an unfair rap ever since the media grabbed the topic 10 years ago and beat the life out of it.  Every client thereafter spit out the same warning when we met. 

I don’t want PMI!

Ok, I get it.  So, most of us started doing the 1st/2nd combo loans that eventually became so popular.  Structure an 80% 1st , put a 2nd behind it for the rest….and presto, no MI!  And we’d still be doing them now except that those high CLTV 2nds are mostly gone. 

There are times however when PMI, or MI as we now call it these days, makes more sense.  And years ago, Congress required lenders to remove MI after 20% equity could be proven with an appraisal.  Values were rising so quickly then that MI could typically be shed after a couple of years.

Last year tax deductible mortgage insurance was legislated by Congress for those with Adjusted Gross Incomes under $100k per year, removing even more of the disincentives.  Still, the stigma lingered…

 

read the rest.... 

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Rainmaker
212,057
Tim Bradford
American Midwest Mortgage - Cleveland, OH
NMLS 250013

Marc,

I did read the balance of your article.    I wish I could do a 90% LTV with only a .25pt adjustment.   I know a local S&L offers a program like that, but am unaware of anyone that offers that on a brokerred basis.    If there is, please share the secret with me.  

Oct 05, 2007 09:43 AM #1
Rainer
23,965
Marc Brinitzer
Big Valley Mortgage - Sacramento, CA

Tim, I think this practice is becoming more commonplace now.  In fact, you can go to MGIC's website at http://www.mgic.com/ and click on Rate Finder.  This will price MI based on Fico's.  

The lender I used in this example is a regional mortgage banker called Sierra Pacific based in Sacramento.  That probably won't help you, but keep an eye out.  I've noticed that Wells Fargo, National City, and others are beginning to practice this, not to the same extent.

Oct 05, 2007 11:51 AM #2
Rainer
52,384
Jennifer Steck
Rocky Mountain Homescapes, Keller Williams, Denver Colorado - Denver, CO
Denver Real Estate
Marc- My last experience with PMI was years ago and it wasn't very good. Sounds like things have improved a bit.
Oct 07, 2007 02:46 PM #3
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Rainer
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Marc Brinitzer

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