Walnut Creek, California-based ""PMI Mortgage Insurance Co."":http://www.pmi-us.com/, the principal operating subsidiary of the PMI Group,[IMAGE]
Inc., recently announced a new online tool to help lenders see the pricing advantages of PMI mortgage insurance versus ""Federal Housing Administration"":http://portal.hud.gov/portal/page/portal/HUD/federal_housing_administration (FHA) insurance on high FICO loans.
The PMI/FHA comparison calculator enables lenders to enter various loan parameters and quickly calculate pricing and relevant savings using PMI mortgage insurance. The company said these savings can be sig-[COLUMN_BREAK]
nificant on PMI's upfront and monthly premium products, which reduce total mortgage insurance cost over a five-year period when compared with FHA insurance.
""We developed this calculator to counter the commonly held but incorrect perception that FHA is always the lowest cost solution,"" said Jan Walker, SVP product development and marketing for PMI. ""On FICO scores above 680, PMI's pricing is better than the FHA and can save borrowers thousands of dollars.""
Lenders can price various scenarios on the new tool by entering loan amounts, credit scores, and loan-to-value ratios using simple drop-down windows. Scenarios assume owner-occupied purchase transactions, 30-year, fully amortizing 6 percent fixed-rate, and conforming loan balances.
Janice Shumaker, SVP for the ""Community Bank of Mississippi in Jackson"":http://www.communitybank.net/, was an early user of the calculator and found the results enlightening.""We recently used the PMI/FHA calculator to review a couple of loan files that could have gone either conventional or FHA,"" she said. ""One of the files would have had the borrower paying an additional $5,700 in expenses with the FHA loan.""