Acronyms
are Good For You
OK, not all acronyms are good, like when the FBI comes
knocking on your door. The good acronyms
we are talking about today are LPMI (Lender Paid Mortgage Insurance) combined
with FHLMC (Freddie Mac) or FNMA (Fannie Mae) – the two big GSEs (Government
Sponsored Entities). Together they are a
thing of beauty for your high FICO (720+) buyers.
Private mortgage insurance (PMI) is required on conventional
loans over 80% loan to value. LPMI
removes the monthly mortgage insurance for the life of the loan. It’s done by slightly raising the interest
rate and having the lender pay for the mortgage insurance upfront. Not only does the typical high FICO buyer
save more on their monthly payment, but we have had two buyers lately qualify
for the house they really wanted where they would not have with standard
mortgage insurance.
FHLMC, or Freddie Mac, has a great purchase program called
Home Advantage. FNMA, or Fannie Mae, has
an excellent purchase program called HomeReady. These products go up to 97% and
offers reduced mortgage insurance rates.
Combine them with LPMI and you’ve got a winning combination! Home Advantage and HomeReady are not a first
time home buyer programs, but guidelines require that the buyer not own another
home at the time of purchase. Call us
for details.
The Easterbrook Team
916.850.6050
No comments:
Post a Comment