MGIC MI: Make it an Option
Split Premiums
Split Premiums give your borrower the option of paying part of the MI premium up front in order to reduce the monthly MI premium paid along with his mortgage payment. The borrower can choose an initial premium rate of .75%, 1% or 1.25% of the loan amount.
The initial premium may be paid by a third party, such as a builder or a seller, keeping the borrower's closing costs down and the monthly MI premium low.
Borrowers with adjusted gross household income of $100,000 or less qualify for the maximum MI tax deduction.
Available on:
| Nonrestricted Markets | Restricted Markets | |||
|---|---|---|---|---|
| Maximum LTV | Minimum FICO | Maximum LTV | Minimum FICO | |
| • Full Doc | 97% | 680 | 95% | 680 |
| • Full Doc | 95% | 620 | 90% | 620 |
| • A-Minus Expanded Criteria |
95% | 660 | – | – |
| • Alt-A Reduced Doc |
90% | 660 | – | – |
With MGIC Split Premiums, you can:
- Structure high-LTV loans
- Finance higher loan amounts
- Receive improved underwriting decisions
- Increase commissions
- Enhance your role as Trusted Advisor and differentiate yourself from your competition by:
- broadening the options you provide borrowers
- notifying borrowers when they may be able to cancel MI and reduce their monthly mortgage payment
Which borrowers should consider MGIC Split Premiums as an option?
- those with available cash at closing whose main concern is keeping the monthly mortgage payment as low as possible
- those purchasing a home in a buyer's market with motivated builders and sellers willing and able to foot the bill
- those who anticipate reducing their LTV — by paying down the principal balance or by their home's value appreciating because of home improvements or market conditions — to qualify for MI cancellation sooner
