PMI Companies Make Home Buying More Difficult.
Lately lenders are not the only ones tightening their belts when it comes to underwriting requirements, PMI companies are pulling in the slack as well. It use to be that PMI was a given, or just something that a loan automatically got when a borrower had less than 20% equity, but those days are gone. PMI companies are now underwriting their policies so tightly that even though the bank may approve your loan the PMI company may not, making it impossible for your transaction to close.
There are six major PMI companies out there.
- MGIC
- RADIAN
- GENWORTH
- RMIC
- UGI
- PMI
Each one has similar guide lines to follow but some are more stringent than others. for example, UGI and PMI will not offer PMI on second homes. Genworth no longer underwrites PMI for any loans that are originated by brokers. The loans that are being turned down are not your bruised credit, not sure if we’re going to get paid loans. No sir, they won’t Evin underwrite those kind of loans any more. The loans that are getting denied PMI coverage are the top of the credit food chain, the good, no, the great borrowers. Simply having an 800 credit score putting down 5-10% of your own money and having a low Debit to Income ratio may no longer be enough.