United Guaranty Corporation is helping renters become homeowners with flexible down payment options and education, to enable young families and individuals to use mortgage insurance to take advantage of the substantial savings a home purchase can provide.
“Recent studies have shown there are many Millennials and young families who could qualify for a mortgage because they’ve been responsible in using credit, but many of them mistakenly believe they won’t qualify for a mortgage or need to save up for a very large down payment,” said Donna DeMaio, president and CEO of United Guaranty. “United Guaranty is committed to helping qualified young families and individuals realize the goal of owning a home, and we can provide a lot of help, as well as flexible down payment options with mortgage insurance”
The company’s Home Buyer Education website provides buyer resources, including:
- A rent-versus-buy analysis detailing how a $175,000 home purchase provides $23,589 in savings over five years versus renting — due to price appreciation (at an assumed 1 percent per year), potential tax savings, and accumulated equity;
- Mortgage insurance options for down payments as low as 3 percent for qualified borrowers who have been responsible with credit; and
- A free online education course that can satisfy requirements for Fannie Mae's MyCommunityMortgage and Freddie Mac's Home Possible Advantage programs — which offer qualifying first-time home buyers low down payments, lower MI premiums, and expanded eligibility requirements.
Down payment is often cited as a key barrier preventing young borrowers from making a home purchase. RealtyTrac estimates it takes a typical borrower 12.5 years to accumulate enough savings for a 20 per cent down payment (assuming a personal savings rate of 5.6 per cent).
DeMaio says that United Guaranty mortgage insurance provides for down payments of as little as 3 percent for those who qualify — and that 3 percent can often come from gift funds.
- 20 percent (without mortgage insurance) $40,000;
- 5 percent (with mortgage insurance) $10,000; and
- 3 percent (with mortgage insurance) $ 6,000.
For many home buyers with a strong history of using credit wisely, United Guaranty mortgage insurance costs less up front and over the life of the loan than FHA
United Guaranty also provides multiple payment options, says DeMaio, including PostPay, a monthly premium that requires no premium when the loan closes — benefitting buyers seeking lower closing costs. The lender will collect the monthly premium as part of the borrower's monthly mortgage payment.
Rising home prices are pushing some borrowers out of the homes of their dreams – but one mortgage insurance provider is offering a solution to make those dreams come true.