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United Wholesale Mortgage (UWM) rolled out a new purchase product that will waive mortgage insurance payments if a borrower opts for a 10%-or-more down payment. But borrowers would be wise to note that they’ll get hit with higher interest rates.
The product, dubbed “MI Buster,” will be available for conventional purchase loans starting at $200,000, as well as for high-balance loans with a loan-to-value ratio between 80.01% and 89.99%, according to a press release issued by the Pontiac, Michigan-based lender on Wednesday.
Typically, if a borrower opts for a conventional loan and puts down less than 20%, they must pay for mortgage insurance until they accumulate 20% of equity in their home, a condition generally set so the loan can be sold on the secondary market. Once that happens, mortgage insurance is usually waived. The wholesale lender’s new product allows a borrower to forgo this step.
UWM, which will not be selling loans with “MI Buster” to Fannie Mae or Freddie Mac and will retain servicing on them, said in a statement that this product “provides a competitive advantage for independent mortgage brokers, allowing them to save their borrowers money on their monthly mortgage payments.”
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The post UWM waives MI with a 10% down payment, but there’s a catch appeared first on HousingWire.
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