MI Basics
The best plan for your borrower
MGIC has a variety of rate programs to choose from. When you're choosing the best plan for your borrowers, take these factors into consideration:
- the length of time the borrower plans on owning the home
- the type of mortgage instrument
- the size of the down payment
- How long does the borrower plan on owning the home?
- For borrowers who don't plan on owning a home for a long period of time, consider BPMI – Singles. If the loan is paid off or mortgage insurance is cancelled within the first five years, the borrower receives a premium refund.
If a borrower anticipates owning a home for more than five years, consider MGIC's Monthly Premiums.
top - What type of mortgage instrument is the borrower interested in?
- Mortgage insurance premium calculations involve many factors, including the percentage of coverage, premium plan selected and loan type.
MGIC charges higher premiums to insure loans with higher LTV ratios or adjustable payments because the risk of default is greater. Some of these factors may raise the cost of the mortgage to your borrower.
top - How much of a down payment is your borrower making?
- Private MI was designed to help those who want to buy a home get over the down payment hurdle and buy sooner. With the help of private MI, borrowers have the option to put less money down and use any left over for investments, home-related purchases or repairs. Below are MGIC's more popular premium plan options.
MGIC’s Monthly Premiums are perfect for borrowers who may have difficulty accumulating cash for closing, but are otherwise qualified to buy a home. With this plan, borrowers experience no increase in the loan amount and need no cash at closing. MI coverage is automatically cancelled at 78% LTV by amortization.
MGIC’s BPMI – Singles premium plan gives borrowers the option of financing the MI premium. Borrowers benefit with a low monthly payment, tax-deductible interest paid on the financed premium and a possible premium refund at the time of pay off.
With MGIC’s LPMI – Singles lender-paid MI, borrowers pay no MI premium. To cover the cost of the premium, the lender may slightly increase loan fees or the interest rate or include the cost of a single-premium MI policy in the amount financed. Generally, the interest paid by the borrower is tax-deductible.
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