MI Companies are notorious these days for making changes without any advance notification. The latest change that we are seeing is that MI Companies have lowered the back end ratio, especially on loans with a 95 LTV to 41%. Also if the area happens to be one that is being classified as a declining area, the lowest LTV that they will issue MI on is 90%.
I don't know if EVERY MI Company has made this change, but the four major ones that issue MI here in Connecticut have adopted these changes. These latest changes further make FHA and VA Insured Loans much more attractive loan products than they have ever been before, especially where First Time Homebuyers are concerned.
There will probably be more changes, given the recent losses that MI companies have been hit with. These days we can not presume that MI will be issued on any loan, and Lenders are being far more careful in Committing Loans before they have received verification that they will be able to obtain MI on loans with less than 80 LTV.
Realtors that have turned their nose up on FHA & VA Loans in the past need to reconsider their position about these loan products, before they advice their Sellers to hold out for a Buyer that is using a Fannie Mae or Freddie Mac Loan Product. These days Buyers that submit offers and are using Fannie Mae or Freddie Mac backed loans are a much higher risk than FHA or VA Borrowers if they do not have 20% to put down.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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