Upcoming Changes with Mortgage Insurance on 12/14/2009
Please note that there will be changes with M.I.(mortgage insurance) on 12/14/09:
Fannie Mae (FNMA) will now have 2 mortgage insurance offerings: a.) standard mortgage insurance coverage b.) lower level of coverage + a loan level price adjustment (increase to rate)
There will no longer be the reduced m.i. coverage (that didn’t have an add on) that is currently offered with DU. Therefore, as an example, where there was a requirement of only 17% coverage for a 90% ltv and a term of 20 yrs or greater, lenders will now be required to get 25% coverage.
** So Far, no lender has decided yet to offer the new "lower level coverage". I will let you know as soon as this opportunity is offered.
FNMA has stated that in most instances the borrower "should generally be in an economically neutral or somewhat improved position" should the lower cost + add on option be chosen
P.S. Freddie MAC does not offer reduced m.i. coverage.
*The table below provides the required standard coverage's that will become effective this weekend.
Remember : This will increase the monthly premium dollar amount per month the consumer has to pay for monthly MI (mortgage insurance). This increase in premium will ultimately increase debt ratios that may effect loan qualification on conventional loans.
Info gratefully provided by:
Sr. Mortgage Consultant
GREENPARK MORTGAGE Corporation
140 Gould Street
Needham, MA 02494