Borrowers with higher credit scores will now be eligible for lower mortgage insurance premiums at Mortgage Guaranty Insurance Corp. Meanwhile, guidelines have been relaxed for debt-to-income ratios, loan-to-value ratios and second homes.
Mortgage insurance rates are being reduced for borrowers whose credit scores are at least 760, according to Bulletin #02-2012 from the Milwaukee-based mortgage insurance company.
Monthly non-refundable rates for high-scoring borrowers with 95 percent LTVs will be 0.59 percent, while 90 percent LTVs will have a rate of 0.44 percent and 85 percent LTVs will cost 0.28 percent. The adjustment for rate-term loans will be 0.05 percent.
The new premiums, which are subject to regulatory approval, are effective on mortgage insurance applications received on or after March 12.
In the Las Vegas area, MGIC said it won’t insure attached housing, cooperatives and condominiums.
In restricted markets MGIC said that the debt-to-income ratio will be limited to 41 percent no matter what the credit score is.
Both of those changes also go into effect on March 12.
In non-restricted markets, MGIC will allow DTI ratios up to 45 percent on loans up to $625,500 as long as the payment is fixed for the first five years. That change becomes effective on Feb. 20.
Also on Feb. 20, MGIC said it begin accepting reserves as determined by DU Approve/Eligible or LP Accept/Eligible approval. It will also accept a determination of credit analysis including requirements for tradeline history, bankruptcies, foreclosures, deeds in lieu and short sales. In addition, the automated technology can be used to determine requirements for income and asset documentation.
Other updates as of the Feb. 20 date include an expansion of LTVs to 97 percent on rate-term refinances and the allowance of construction-to-permanent loans and condominiums in non-restricted markets. In addition, second homes will require credit scores of just 700 and DTI ratios of as much as 45 percent, while rate-term refinances and construction-to-permanent loans will be allowed as will attached housing, cooperatives and condominiums.
On construction-to-permanent loans, separate requirements are being eliminated and standard guidelines can be used. Another update is the ability to use as-completed appraised values in LTV ratio calculations regardless of when the lot was purchased. The expanded construction-to-permanent guidelines go into effect on Feb. 20.
