Mortgage insurance continues to be vital to the US housing finance system as more and more borrowers face the challenge of coming up with a down payment, according to a report by U.S. Mortgage Insurers (USMI), an association representing five of the top six private mortgage insurance companies in the US.
The report found that 1 million borrowers took out a purchase or refinance mortgage with the help of mortgage insurance in 2017. Of the total number of borrowers, 56% were first-time homebuyers and more than 40% had incomes below $75,000. These homebuyers had an average FICO credit score of 741 and on average took out a mortgage loan for $237,961.
Texas topped the rankings in terms of the number of homeowners who took a loan with mortgage insurance. 79,030 homeowners in the state did so. California (72,938), Florida (69,827), Illinois (47,866), and Michigan (41,810) rounded out the top five states where homeowners purchased or refinanced a home with mortgage insurance last year.
USMI noted that by helping borrowers qualify for a mortgage with a down payment as low as 3%, mortgage insurance has given nearly 30 million families nationally the opportunity to purchase a home sooner over the last 60 years.
"Private mortgage insurance has helped millions of first-time and middle-income homebuyers across the United States for more than 60 years. This report confirms what we have long known: MI is a critical piece of the US housing finance system, helping Americans realize the dream of homeownership while providing important protections to taxpayers and the federal government," USMI President Lindsey Johnson said. "For decades, low down payment borrowers have relied on MI to help them affordably and responsibly buy a home, and MI will continue to serve countless more prospective homebuyers in the years to come."
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