Real Estate Agents
Help your buyers save thousands over FHA – and get homes moving faster!
Your clients come to you for professional advice, so first ask the question: Is their credit score 680 or higher and do they have 5% or more for a down payment1?
If the answer is yes: A funding option to consider is one of PMI’s rate plans that can save your clients thousands over FHA!
PMI rate plans are a good fit for different borrower situations:
A. Looking to lower the overall monthly payment?
Solution: PMI Super SingleSM is a one-time, upfront payment that can be paid in full at closing, paid with a seller contribution, financed into the loan amount, or a combination of these options.
Benefit versus FHA: Unlike FHA, there’s no monthly premium with Super Single, so the overall monthly mortgage payment is lower. Plus the borrower can save thousands over FHA based on the total MI obligation paid over 5 years.
Selling tip: You can move homes faster by packaging Super Single with seller contributions up to 3% or up to 6% (depending on the market and the buyer’s down payment). The contribution can be used to help pay the one-time MI premium or both the MI and closing costs.
B. Looking to save cash at closing?
Solution: pmiNU MonthlySM reduces the overall MI obligation because there’s no upfront premium, unlike FHA – which will require an upfront premium of 2.25% – that must either be paid or financed into the loan amount.
- Interest will be paid over time on the added upfront premium on the FHA loan amount, which increases the overall loan size, and
- P&I payments are based on the total loan amount times the interest rate.
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1 In distressed markets, maximum LTV is 90% with minimum credit scores of 700 or 720 (depending on the market).
2 FHA premium is based on HUD Mortgagee Letter 2010-02 announcing upfront MIP increase to 2.25% on loans for which an FHA case number is received on or after 4.5.10.
3 FHA and PMI scenarios assume upfront MI is not financed, and FHA renewal premium is applied to $200,000 amortizing balance over 5-year period.
4 25% Coverage, 30-Year, Fixed-Rate Loan.
