Oklahoma Mortgage Group - Mike David

  A newly signed executive order has created an attention-grabbing headline: some borrowers could eventually have private mortgage insurance canceled proactively. That possibility is real, but it is not an immediate, universal change. The October 22 order directs the Federal Housing Finance Agency to establish a pilot program involving eligible single-family mortgages owned, guaranteed or securitized by Fannie Mae or Freddie Mac. The proposed system would use automated valuations and other data to identify borrowers who appear to meet equity and additional cancellation requirements. The pilot would apply only to mortgages made after the program is established. Eligibility, payment-history, safety-and-soundness and contractual requirements would still apply. The White House What can existing homeowners do now? Many borrowers with conventional loans already have PMI-cancellation rights. For qualifying mortgages, homeowners can generally request cancellation when the principal balance...

A buyer can love the home, negotiate an acceptable price and receive a competitive mortgage rate—then discover that the homeowners-insurance premium changes the entire payment. Insurance is not simply a closing document. It is part of the buyer’s monthly housing expense and mortgage qualification. What is included in the housing payment? When buyers talk about a mortgage payment, they often mean principal and interest. Lenders generally need to consider the more complete expense, which may include: Principal and interest Property taxes Homeowners insurance Mortgage insurance HOA dues Other required property-related expenses If the actual homeowners-insurance premium is higher than the estimate used during preapproval, the monthly payment increases even if the loan amount and mortgage rate remain unchanged. That can affect the buyer’s debt-to-income ratio and available purchasing range. Which homes may require extra attention? Every property needs appropriate coverage, but an earlier in...