MGIC MI: Make it an Option
One-Time MI
A one-time premium paid up front by the borrower. The mortgage insurance is cancelable, refundable and may even be financed into the loan.
With One-Time MI you can:
- Increase commission by getting paid on 1 higher loan amount
- Simplify processes with 1 loan – 1 set of guidelines and 1 set of docs
- Receive improved underwriting decisions
- Offer borrowers 1 low monthly payment
- Provide borrowers a one-loan tax-deductible solution
- Help borrowers receive a refund if canceled within the first 5 years
Which borrowers should consider the One-Time MI option?
- Ideal for the borrower who wants the lowest possible monthly payment and has cash to use at closing or is willing to finance the premium in the loan amount.
- Great in a buyer’s market where the builder or seller may be willing to pay all or part of the MI premium at closing, lowering the borrower’s monthly payment.
- An excellent tool for the borrower who anticipates rapid home appreciation. By canceling MI within the first five years, the borrower may be refunded a portion of the premium.
| Assumptions: Property Value: $300,000; 90% LTV; 680 FICO Score;1st and 2nd Mortgage Term, 30-Year Fixed; Annual Home Appreciation Rate of 5% | |||
| Piggyback | One-Time MI (financed) |
One-Time MI (paid by seller) |
|
|---|---|---|---|
| 1st Mortgage Amount | $240,000 | $270,000 | $270,000 |
| MI Premium Financed | $0 | $5,670 | $0 |
| MI Premium (Paid by seller) |
$0 | $0 | $5,670 |
| 2nd Mortgage Amount | $30,000 | $0 | $0 |
| Total Amount Borrowed | $270,000 | $275,670 | $270,000 |
| Starting Interest Rate | |||
| 1st Mortgage | 6.50% | 6.50% | 6.50% |
| 2nd Mortgage | 9.00% | 0.000% | 0.000% |
| Monthly Payment | |||
| 1st Mortgage | $1,517 | $1,742 | $1,707 |
| MI Payment | $0 | $0 | $0 |
| 2nd Mortgage | $241 | $0 | $0 |
| Total Monthly Payment | $1,758 | $1,742 | $1,707 |
