In March, Mortgage Insurance (MI) companies for conventional loans cut their max Debt-to-Income ratio from 55% down to 41% max. I blogged about it here.
Now, the new and more strict requirement, which is going into effect next week, is an increase in minimum credit score. The new FICO requirement is increasing from 700 minimum to 720 minimum.
Remember that Mortgage Insurance is required when you have less than 20% down. Your credit score is so crucial to any type of loan you can get, so please always be aware of what you can do to maintain and improve it. And, as always, let me know if you need help in figuring this out.
As always, you continue to keep the industry and public so well informed, Irene! The changes that are coming in lending will only make the knowledgeable and experienced Mortgage Brokers like you be the ones who are at the forefront of the market! Thank you!
Can I shop around to get a term insurance on my own to cover my mortgage as opposed to getting mortgage insurance through my lender.
Hi Wayne, unfortunately you can’t shop around. Mortgage Insurance companies are entities that only provide insurance for this purpose. Also, I should clarify that this is insurance that protects the lender, not you. You may be thinking about another type of mortgage insurance that covers your mortgage payments in case of death or permanent disability. That type of insurance you can shop around for.
Again though, the Mortgage Insurance I’m referring to is required by the lender when you have less than 20% down, and it serves only to protect the lender, because you would be deemed a more risky borrower. Does this help clarify?