United Guaranty Pricing Expands Options, Creates Opportunities
April 28, 2016 / John Gaines, Executive Vice President and Chief Underwriting Officer
Spring gets home sellers out of doors, improving curb appeal to attract potential buyers. Sprucing up the inside of the home receives similar attention with the intent that their efforts will help encourage a sale.
Mortgage insurers have been equally busy in recent weeks in preparation for the home-selling season, with much of the activity focused on reducing rates for a select set of higher-credit borrowers.
United Guaranty, the industry leader in terms of traditional MI and insurance in force, offers competitive pricing, but rather than simply cutting the rates of certain credit bands, we're focused on creating more opportunities for homebuyers.
Because the tiered rates used by most other mortgage insurers consider just a few basic risk categories—such as LTV, coverage, and credit score—they bucket all loans and borrowers in wide categories, giving little or no consideration to unique loan risk and borrower financial data.
United Guaranty's Performance Premium® is a sophisticated, risk-based pricing model that has been helping borrowers save money over the life of their loans since 2009. Performance Premium considers many predictive variables beyond the typical MI rate card to provide borrowers with pricing that matches each loan's risk profile. This allows us to provide:
- Highly competitive rates for qualified borrowers, including those with credit scores under 760, which accounts for more than half of the home-buying market.
- Flexibility to consider borrowers and non-primary residences that are more difficult to insure.
Also, private mortgage insurance has more benefits for the buyer when compared with an FHA loan—which continues to hold true after the latest pricing changes across the MI industry.
For a detailed comparison of the savings borrowers will see with borrower- or lender-paid MI options from United Guaranty, visit our Borrowers Save More web page.
With FHA, borrowers are locked into paying MI for the entire life of the loan when the down payment is less than 10 percent. With a down payment of 10 percent or more, FHA is cancellable after 11 years.
Borrower paid private MI from United Guaranty cancels automatically when the borrower has paid down the balance to 78 percent of the original value—and the borrower can request cancellation when the balance reaches 80 percent if certain additional conditions are met.
Those are financial benefits that can be translated into buying power. When you pair private mortgage insurance with programs such as Fannie Mae's HomeReady, you'll be helping more buyers own homes.
These are options you just don't have with FHA. So in the wake of change, keep in mind the options that come with United Guaranty MI. You may find that the options afford you the ability to close more loans in the process. And what could be better than that?
John Gaines is United Guaranty's Executive Vice President and Chief Underwriting Officer. He manages United Guaranty's Pricing, Credit Policy, Underwriting Modeling, and Lender Evaluation and Management teams. He most recently held the position of senior vice president, deputy chief risk officer at United Guaranty. Gaines joined the company in 1998 in the Structured Products department, which he eventually managed. He has also served as senior vice president, national accounts, and chief operating officer of United Guaranty's operations in Canada. Gaines is a Fellow of the Casualty Actuarial Society. He earned a BS in mathematics from Bob Jones University and an MS in mathematics from Clemson University.
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