DEC 3, 2013 11:49am ET

Wholesaler Launches LPMI Product

Print
Reprints
Email

Wholesale lender RightStart Mortgage, Pasadena, Calif., has launched a new lender-paid mortgage insurance product in response to rising Federal Housing Administration MI costs.

“Our customers have been looking for alternative products to place their lower-downpayment customers, and compared to FHA, the savings with our program are significant,” David Williams, VP, RightStart, told this publication when asked about the catalyst for the move.

A $285,000 wholesale LPMI loan can lower a borrower’s monthly payments by as much as $200, for a savings of more than $28,000 over 10 years compared to an FHA loan, according to RightStart.

The product is available on conforming, owner-occupied home loans with a maximum $300,000 purchase price, a 5% downpayment and a minimum 750 Fair Isaac & Co. credit score. The company does business in 10 states.

The pending qualified mortgage rule’s exemption for LPMI from the 3% points and fees test loans must stay within to receive certain legal protections also was a consideration, Williams said when asked about this.

“We feel there are several advantages with offering LPMI. For example, not only will it not be counted in the 3% rule for QM, but it also helps with new, tighter debt-to-income requirements. However, QM was only one factor behind rolling out this product,” he says.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments:
You must be registered to post a comment.
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.
Twitter
Facebook
LinkedIn
Already a subscriber? Log in here
Please note you must now log in with your email address and password.