Mortgage Insurance has made it possible for home buyers to get in homes with little or no money down. Changes this past week with many of the top pmi companies are going to make it much more difficult to buy a home without a large down payment unless you have a good credit score. MGIC is one of the largest mortgage insurance companies so I will use their recent guideline changes as an example. Their new underwriting summary chart is as follows:
Full Documentation:
100% Financing Purchase- Minimum Credit Score = 680
95% Financing Purchase- Minimum Credit Score = 620
90% Cash Out Refinance (maximum)- Minimum Credit Score = 680
Reduced Documentation:
90% Stated Income/Stated Asset Purchase- Minimum Credit Score = 660
There are many other variables to consider like debt ratios, loan type, property type, etc. when attempting to obtain pmi for a mortgage transaction. For full guideline change details for MGIC, go to the following address: http://www.mgic.com/guides/underwriting.html.
There are other mortgage insurance companies who have different guidelines. Some are more lenient than MGIC regarding certain parameters. However, most have stricter guidelines. See other pmi company guidelines at the following addresses:
Genworth - http://www.mortgageinsurance.genworth.com/
AIG-UG - https://www.ugcorp.com/
Radian - http://www.radian.biz/mortgage/index.aspx
RMIC – http://www.rmic.com/Pages/default.aspx
PMI - http://www.pmigroup.com/index.php
With all the changes to guidelines of pmi companies, FHA has become a very popular option for purchasing a home with less money down. Check your parish or county's loan limits for FHA at the following address:
https://entp.hud.gov/idapp/html/hicostlook.cfm
If you can buy your home using FHA financing, you may find it to be a better option. True mortgage professionals can do a full comparison between conforming and government loans to help find the best option for the client.
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