There are various Mortgage Insurance options - The lender paid MI, Borrower paid MI and Private mortgage Insurance, Mortgage Life Insurance and the like. But hey, are you applying for such a policy? _________________ Procrastination is the enemy of your financial sucess
There are different mortgage insurance policies that are available to borrowers. They are mentioned as follows:
Mortgage Life Insurance: This insurance policy ensures that the mortgage will be repaid in full in case the borrower dies. Here the insurance premium is added to the mortgage payments.
Private mortgage insurance (PMI): It is an amount paid by a private insurance company to a lender in case the borrower is unable to pay off the loan. When a borrower makes a down payment of less than 20% of the home value, he is required to pay this insurance costs.
Mortgage Critical illness Insurance: When a borrower suffers from some illness, the critical illness rider is added to his mortgage life insurance. It helps him to pay off his mortgage.
Since you’re an underwriter and use those specific terms, I assume your talking about usage of “MI” in the normal sense with conventional mortgages.
Broad categorization covers it but there are subdivisions. Within monthly BPMI you should be familiar with the various discount breaks by FICO score. There are some “branded” products also that will make dollar amount of MI vary from the standard. Radian has a “free after 5”, I think, and there should be others out there. Single-pay financed MI is still out there but not used much. Glow fell off that rose when MI had to move to refundable status.
Obviously you need to be familiar with the limited of your delegated authority to approve MI with referral to the MI company. Technically one other forms exists although it’s an oxymoron – MI waiver – There is no MI at all (lender is carrying the entire risk) and I’ve not seen this offered at greater than a 85% LTV. There used to be some lender participating MI plans; no idea if they’re still around.
As for those other forms of “mortgage” insurance, they are high markup products and if you see a LO with a high percentage of loans with this type of insurance, I’d spend extra time going over the loan. Remember when the automobile deal F&I pitched “scotch guarding the seats” at the tail end of the sale? Same issue. Just a personal bias.
aswain
