RightStart Mortgage has launched a new lender paid mortgage insurance (LPMI) product that enables borrowers to lower monthly payments while avoiding the expense of paying mortgage insurance. Lender paid mortgage insurance is now available through the company’s RightStart Wholesale division, a fast-growing Fannie Mae seller/servicer and a direct Ginnie Mae issuer with a strong focus on fast turn times and short closings.
With LPMI products, the lender pays for the mortgage insurance in exchange for a slightly higher interest rate. RightStart Wholesale’s LPMI product is available on conforming loans only and is limited to borrowers who plan to live in the home. The maximum purchase price is $300,000 and a 5 percent down payment and minimum FICO score of 750 are also required.
Compared to an FHA loan, a $285,000 RightStart 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.
"Many borrowers are still having trouble getting a loan that works for them because of tightened credit requirements," said Buster Williams, president of RightStart Mortgage. "Since our new lender placed mortgage insurance lowers monthly payments, it lowers the borrower’s debt-to-income ratio, which helps the borrower qualify. In addition to helping borrowers save money, this new option also gives our broker partners a competitive advantage in the marketplace at a time when interest rates are still near historical lows.”