Tuesday, December 4, 2018

Mortgage Insurance or PMI Guide for Kentucky Home Mortgage Loans


Private Mortgage Insurance or PMI Guide for Kentucky Home Mortgage Loans

Borrower-Paid Monthly (BPMI)
  • BPMI permits the borrower to pay the MI premium monthly, or as a single up front premium.
  • You can finance the single premium into the loan.
  • BPMI helps lenders offset the risk of a low down-payment mortgage.
  • Borrowers can qualify for a loan with a smaller down-payment, enabling them to purchase a home sooner.

Lender-Paid (LPMI)
  • Benefits the borrower and lender
  • With LPMI, the lender pays the MI premium on behalf of the borrower. Thus allowing the lender to charge a slightly higher interest rate on the loan.
  • In addition to increasing loan volume, LPMI lets you realize additional servicing profits through secondary marketing execution. Benefits include:
  1. Potential to originate larger first mortgages, resulting in higher servicing values
  2. Increase retention rates and repeat loan transactions through higher customer satisfaction
  3. Risk-based pricing options can offer even better rates for credit-worthy borrowers
  • Benefits to the borrower
  1. Lower down-payment needed
  2. Possibility of qualifying for a larger loan without increasing monthly payments

Borrower-Paid Single Premium
  • A single premium is a MI product that can be financed, paid using seller concessions, other contributions, or paid out of the borrowers own funds.
  • Saves the borrower significant money on the long term cost of MI. If it is financed it is also tax deductible because it is financed into the loan.
  • The cost of MI overall usually equates to four-five years of premium. In some cases, with credit score buckets, it can be much less.

Split-Monthly
  • By splitting the MI cost into an upfront premium and a smaller monthly renewal, split MI dramatically reduces a borrower’s monthly MI payment.
  • Split-monthly can help the borrower qualify for a larger loan while generating higher profits for the lender.
  • Split-MI can give you a competitive advantage over the competition by lowering the monthly MI. The monthly MI may be reduced by paying an “upfront premium” to buy down the monthly MI. The upfront premium may be financed: paid using seller concessions, lender credits, or paid in cash at closing. You can use a combination of these options to cover the up front premium.
  • The upfront split premium counts in points and fees just like single premium MI.
  • May be used as a strategy to help reduce a DTI over 45 to avoid a price adjustm








If you want a personalized answer for your unique situation call, text, or email me or visit my website below:






Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916


American Mortgage Solutions, Inc.
10602 Timberwood Circle 
Louisville, KY 40223
Company NMLS ID #1364



Text/call: 502-905-3708

email: kentuckyloan@gmail.com










http://www.nmlsconsumeraccess.org/
 
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.   
 
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/
 
-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.


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