MGIC has relaxed some of its underwriting guidelines. Among the changes are higher loan-to-value ratios, increased loan amounts and reduced credit scores.
With a credit score of at least 720, the maximum loan amount on one-unit properties has been raised to $650,000 from $450,000.
The LTV ratio is 97 percent.
On residential loans up to $650,000 with LTV ratios up to 95 percent, the minimum credit score on one-unit properties has been reduced to 680 from 700.
The updates were outlined in MGIC Bulletin 02-2017.
With credit scores of at least 720, transactions up to $850,000 can have LTV ratios up to 95 percent, while loan amounts up to $1 million are available at 90 percent LTV. Loan amounts up to $1.5 million are available at 85 percent LTV with a minimum credit score of 740.
Credit scores on transactions up to $850,000 with LTV ratios up to 90 percent have been lowered to 680 from 700.
MGIC said the borrower contribution
has been updated to a minimum of 10 percent on loan amounts above $850,000. The maximum debt-to-income ratio is 43 percent. Nine months’ reserves are required on loans up to $1 million and 12 months on loan amounts in excess of $1 million.
The bulletin indicated that land value on rural properties in excess of 20 acres cannot exceed half of the total value. The loan limit is $850,000.
Eligible products now include 5/5 adjustable-rate mortgages. borrowers will be qualified at the note rate plus 2 percent.
