PMI Unveils Split-Premium MI Rates

The PMI Group is rolling out a new rate structure for mortgage insurance that will allows homebuyers to finance or pay part of the premium up front.The new split-premium rate structure reduces the monthly MI premium so borrowers can shave $19 to $53 a month off their monthly mortgage payments. "When you are talking about affordability and somebody is right on the edge of qualifying, this can make the difference," said Taia Lockhart, PMI's director of emerging markets. Four lenders are already working on affordable housing products that use the split-premium rate structure, she said. The upfront premium ranges from 1.5% to 2.5% on loans with loan-to-value ratios of 90% or higher. But the borrower can use gifts from family members, downpayment assistance from nonprofit organizations and cities, and seller concessions to pay the upfront premium.