PMI Companies Decide to Shuffle Guidelines – You Need To Read This! - Des Moines, Iowa Mortgage

If you haven’t heard yet, there have been some BIG changes at the private mortgage insurance companies. Since PMI companies are the real risk takers when financing over 80%, they’ve decided to really tighten up their guidelines in the past two months.

Whether you’re a borrower looking for answers, or an originator trying to make something of this mess. You’ve come to the right place. I’ve been doing a TON of research to get guidelines updated as of today. I must warn readers that these guidelines can change at a moments notice and most likely will. So take the information with caution and check directly with mortgage insurance companies (customers, have your loan officer do this) to make sure that the loan still qualifies. Often, we cannot order mortgage insurance until we have the loan underwritten. So the faster you can move, the better off you are.

Real quick – Mortgage Insurance is a product that lenders require borrowers to carry to insure them for the amount lent over 80% of the purchase price on purchases or appraised value on refinances. If you can’t get PMI, you can’t get a mortgage loan – period.

FICO (credit score) based risk is the new way things are now done in the mortgage industry. As mentioned before, we’ve seen the guidelines changes for the mortgage insurance specifically on that factor (I’m sure we’ll see Fannie and Freddie do the same thing soon). Here’s the readers digest version of the changes:

For Owner Occupied Loans with an ‘Approve/Eligible’ (Top Teir Fannie Mae Approval)
Max LTV 80.01- 95% need a minimum score 620 (Purchase or Rate/Term)
Max LTV 95.01-100% need a minimum score of 680 (Purchase or Rate/Term)

Max LTV 80.01-90% need a minimum score 680 for Cash Out. (Effective March 14)

For Owner Occupied Loans with a ‘Level’ approval (Less Than Cream of the Crop, a Growing Pool)
LTV’s less than 80% need 620 minimum score
Max LTV-80.01- 95% need a 660 minimum score (Purchase or Rate/Term)
Max LTV-80.01- 90% need a 680 minimum score for Cash Out.
** There are no ‘level’ approvals on non-owner occupied properties with any LTV **

For Non-Owner Occupied with an ‘Approve/Eligible’
Max LTV 80.01-90% need a minimum score 660 (Purchase or Rate/Term)
Max LTV 80.01-90% need a minimum score 720 (CASH OUT)

If you’re a borrower currently looking for answers, I hope you find this summary beneficial.

If your current loan officer has: