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Mortgage insurance provider Genworth Financial has seen use of its Single Premium Mortgage Insurance triple in the last year. Homebuyers who tried to avoid mortgage insurance in the past find it and other newer types of mortgage insurance a timely solution to the unpredictable, nontraditional mortgage alternatives.
"First-time buyers and others looking to refinance to get out of a turbulent mortgage are primarily the ones we see using the Single Premium solution. It offers the lowest monthly payment of all and doesn't bear the risk of payment shock," says Kevin Schneider, president of Genworth's U.S. mortgage insurance business.
Single Premium Mortgage Insurance lets buyers borrow up to 100 percent of the price of the home with no added monthly fees by financing the one-time premium over the entire term of the mortgage. The monthly payment, which stays fixed when combined with a fixed-rate mortgage, is also available to borrowers with less-than-perfect credit.
As a bonus, if the value of the home appreciates enough to cancel the insurance within the first five years, buyers receive a partial refund for the initial premium. In today's real estate environment, mortgage insurance sometimes cancels in as little as two to three years.
"We just don't want to see people gambling with their homes anymore," adds Schneider. "This is why we have also developed solutions that offer involuntary unemployment insurance which covers mortgage payments should paychecks suddenly and unexpectedly stop coming in." Genworth offers this unemployment insurance with the Single Premium product at no cost to the borrower.
For more information or to compute monthly payments using a loan calculator, visit the Web site at www.SmarterMi.com
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