Two words that have  become more and more common in mortgage transactions:  Mortgage Insurance.

With credit standards tightening, the days of the piggyback mortgage (80/20, 1st and 2nd Mtg) have slowly dissapated from any borrower that cannot put more than 5% down.  Now more than ever it is time for everyone to be educated on Mortgage Insurance and how to work with or around those expensive premiums.  Provided is an example of ways that I have found to maximize my borrowers money when looking to purchase of refinance any property over a Loan to Value of 80%.

Example:  First Time Home Buyer Looking for a No Money Down Mortgage

Recent years have allowed for most first time home buyers (should they have over a 680 credit score and be able to fully document themselves) the ability to avoid mortgage insurance premiums.  2nd Mortgage rates were low enough to offset the cost of a MI premium...

Today, very few Lenders offer 80/20 products and if they do, they come at a cost to the borrower.  2nd lien rates typically lie at or over 9% and because of recent years statistics, have also caused 1st mortgage rates to adjust higher as well.  In order to sell this, you have to have settled in as a mortgage professional and aren't willing to put the time and effort in to finding a better solution for your customer...maybe until now.

With FannieMae's "MyCommunity" product, 100% financing is now available to most borrowers (620+ FICO & Income limitations unless area classified as underserved) with a reduced mortgage insurance premium.  On top of that, a majority of MI providers will allow the insurance premium to be split between a reduced upfront premium (which can be included in their seller paid closing costs!) and reduced monthly premium (hence the term "split").

Imagine your first time homebuyer obtaining a $200,000 mortgage with as little as a $500 earnest money deposit and getting one loan and paying $15/mo. in mortgage insurance as compared to $160/mo. payment under conventional loan standards.  See below for split premium options and contact me for further information. 

I would explain more in detail but it's Friday and my wife and son are in my office waiting for me.