How to Input Mortgage Insurance

Transcription

1 How to Input Mortgage Insurance TPO Connect Job Aid Based on the type and terms of your loan transaction, Mortgage Insurance may be required. This job aid will provide instructions for inputting the MI factors under conventional, FHA, USDA and VA loans. To correctly input MI information into TPO Connect, you will first identify the agency and product MI requirements specific to your loan transaction. 1. Conventional MI TABLE OF CONTENTS Loan Type Found on Pages Conventional 1-9 o Borrower Paid, Monthly Premium o 1-3 o Borrower Paid, Single Premium o 3-5 o Financed Premium o 5-7 o Split Premium o 7-9 o Lender Paid Mortgage Insurance o 9 FHA USDA VA Once you have determined the required MI coverage (percentage) based on your loan terms, you will then pull a quote (from an-nfm Lending Partners-approved MI provider) for all conventional loans with LTV s exceeding 80.0%. The mortgage insurance quote should be printed and saved to the loan file under 1. Submission Overview bucket to support your loan terms as submitted. Borrower Paid, Monthly Premium Borrower Paid Monthly Premium is the mortgage insurance coverage that is paid by the borrower and included in the proposed monthly PITIA. In this example, the base loan amount of $225,000 results in a 90% LTV and this will require 25% MI coverage with factors of.46% in years 1-10, and.20% in years 11 through term payment.

2 From the > Loan Info page, you will first select the MI Coverage calculator icon to bring up the MI Calculation table. In this scenario of a borrower paid monthly premium, you will then complete all items under Monthly MI, as shown below. Calculated Based On This should always reflect Base Loan Amount. Items #1 and #2 This section applies to the factors determined per your MI quote. In this example, box #1 should reflect the years 1-10 (120 months + 11 months = 132 months) and $86.25 / month. Box #2 should reflect years 11 through term payment (120 months is to be used for the a factor of.20%. Cancel At, Number of Months, Prepaid Amount You will leave this section blank in the borrower paid monthly premium scenario. DONE After the factors are accurately input, you will select the Done action button to apply the terms to your loan transaction.

3 After your MI terms are input and applied, the MI coverage and months will populate and display the terms as input into the MI calculator. The Mtg. Ins. field under > Income & Expenses will populate the monthly payment as calculated based on the terms input in the prior steps. You should always double check and confirm the monthly payment as populated is correct and matching to the monthly payment per the MI quote. Borrower Paid, Single Premium Borrower Paid Single Premium is the mortgage insurance coverage that is paid by the borrower, in full, at closing on the final CD. In this example, the base loan amount of $225,000 results in a 90% LTV. This will require 25% MI coverage with an upfront MI Rate of 1.48% and $3,330 will be due at closing.

4 From the > Loan Info page, you will first select the MI Coverage calculator icon to bring up the MI Calculation table. In this scenario of a borrower paid single premium, you will then complete all items under Upfront MIP, as shown below. Base Loan Amount, This will carry over from Loan Info. MIP/Funding/Guarantee You will input the upfront MIP factor of 1.48%, and the Amount will automatically calculate. Amount Paid In Cash You must first select the Lock checkbox to open up this field. For premiums paid in full at closing, you will input the total dollar amount due. Upfront/MIP/Funding/Guarantee Fee Financed For single paid premiums, this box will remain blank. Loan Amount with Upfront MIP/Funding Fee For single paid premiums, the base and financed loan amount should be the same/matching. You will then select the checkbox to indicate Charge for insurance collected upfront at closing DONE After the factors are accurately input, you will select the Done action button to apply the terms to your loan transaction.

5 After you select the Done action button, the terms will be applied to your transaction. The Loan Info MI Coverage section will remain blank in an upfront premium scenario, but you will confirm the total dollar amount due as verified on your MI quote is matching and correct under Transaction Details. Financed Premium Borrower Paid Finance Premium is the mortgage insurance coverage that is paid by the borrower by rolling the cost of the premium into the loan amount. In this example, the base loan amount of $225,000 results in a 90% LTV. This will require 25% MI coverage with an upfront MI Rate of 1.48%. The premium amount of $3,330 will be added into the Total Loan Amount and amortized over the term of the loan.

6 From the > Loan Info page, you will first select the MI Coverage calculator icon to bring up the MI Calculation table. In this scenario of a borrower paid single premium, you will then complete all items under Upfront MIP, as shown below. Base Loan Amount This will carry over from Loan Info. MIP/Funding/Guarantee You will input the upfront MIP factor of 1.48%, and the Amount will automatically calculate. Amount Paid In Cash You will leave this section unchanged/blank. Upfront/MIP/Funding/Guarantee Fee Financed Because Amount Paid In Cash is $0 / left blank, TPO Connect will consider the MIP to be financed. Loan Amount with Upfront MIP/Funding Fee This will update to reflect the base loan amount + MIP premium, and is how you will confirm the system is correctly financing the upfront MIP. The remainder of the options will remain blank. DONE After the factors are accurately input, you will select the Done action button to apply the terms to your loan transaction.

7 After you select the Done action button, the terms will be applied to your transaction. The Loan Info section will still reflect the BASE loan amount, however Transaction Details will reflect the terms of the financed MI. Split Premium Borrower Paid Split Premium is the mortgage insurance coverage that is partially paid as an upfront premium, and part of the premium is paid in the monthly PITIA. In this example, the base loan amount of $225,000 results in a 90% LTV. This will require 25% MI coverage with an upfront MI Rate of 1.00%, and a monthly factor of.24%. With the requirement of both an upfront premium in addition to monthly, both areas must be completed.

8 From the > Loan Info page, you will first select the MI Coverage calculator icon to bring up the MI Calculation table. Upfront MIP Base Loan Amount This will carry over from Loan Info. MIP/Funding/Guarantee You will input the upfront portion of the MIP factor of 1.00%, and the Amount will automatically calculate. Amount Paid In Cash You must first select the Lock checkbox to open this field. For split premiums, you will input the dollar amount of the factor specific to the amount paid upfront 1.00% or $ in this example. Monthly MI Calculated Based On This should always reflect Base Loan Amount. Items #1 and #2 This section applies to the factors determined for your monthly payment of the split premium. In this example, box #1 should reflect the factor for years 1-10 (total of 132 months), and box #2 should reflect the factor for years 11- Box #2 should reflect years 11 through term payment (120 months is to be used for the a factor of.20%. After all factors are input, you will then select Done to apply the requested terms. The monthly MI factors will be displayed on the Loan Info page.

9 The monthly MI payment will populate under the proposed payment > Monthly Housing Expenses, and the upfront MIP payment of $ will populate in > Transaction Details and will be collected on the final CD at closing. Lender Paid MI Premium Lender Paid MI is when the cost of mortgage insurance is built into the loan pricing (i.e. qualifying rate), and the premium is paid directly by the lender after loan consummation. In the example below, the base loan amount of $225,000 results in a 90% LTV. This will require 25% MI coverage with a quoted factor of 2.44% and a total premium of $5,490. Because the premium is considered in the pricing of the loan and paid by the lender, there will be minimal reference to Mortgage Insurance or the premium. From the > Loan Info page, you will leave the MI Coverage and MI Months sections blank and select the Lender Paid Mortgage Insurance check box to indicate the election of Lender Paid MI on any transaction.

10 2. FHA MIP In the example below, the borrower s have requested an FHA purchase at max financing with a base loan amount of $250,000. Per FHA, the current MIP factors in this scenario will be 1.75% due upfront, and.85% monthly for 360 months. With the agency requirement of both an upfront premium in addition to monthly, both areas must be completed. From the > Loan Info page, you will first select the MI Coverage calculator icon to bring up the MI Calculation table. You will first input 1.75% under Upfront MIP and this will update the financed part of the required mortgage insurance. When inputting the upfront factor of 1.75%, the MIP dollar amount will automatically calculate using the base loan amount. In this example, the total upfront MIP is $4,375. By leaving Amount Paid In Cash at $0 (blank), you are instructing TPO Connect to finance the entire upfront MIP. You will confirm this is accurately considered in the Total Loan Amount - $250,000 base + $4,375 financed upfront MIP = total loan amount of $254,375.

11 You will then input the monthly MI factor of.85% over the total life of the loan (360 months in this case) to calculate the monthly MIP payments and select Done to apply these terms. The monthly MIP payment will then be populated in the Proposed Housing Payment from > Income & Expenses.

12 3. USDA Rural Development Guarantee Fee In the example below, the borrower s have requested a Rural Development purchase loan at 100% financing, so the purchase price of $250,000 will also be the base loan amount. Per USDA, the current Guarantee Fee factors in this scenario will be 1.00% upfront fee, and.35% monthly for the first 12 months. With the agency requirement of both an upfront premium in addition to monthly, both areas must be completed, and you will then select the Done action button to apply the calculations. Guarantee Fee Appraised Value and Loan Amount This will carry over from Loan Info. MIP/Funding/Guarantee Monthly MI Annual Fee Calculated Based on Loan Amount This section applies to the factors determined for your annual monthly payment of the Guarantee Fee. You will input the upfront portion of the MIP factor of 1.00% from the drop-down options. Entire Guarantee Fee will be financed By selecting the check box as shown here, you will indicate the financing of the entire upfront Guarantee Fee and the Total Loan Amount will reflect the financed MIP. In this example, box #1 should reflect the factor for annual Guarantee Fee 12 months. Box #2 will remain blank, and then you will select the Done action button to apply the calculations. Calculate based on remaining loan amount should remain checked. You will then see the 1003/Loan Information page updated to reflect the MI Coverage and MI Months as per the values as input above, and the proposed housing payment under 1003/Income & Expenses will reflect the monthly annual fee under Other.

13 If your borrower wishes to pay the upfront Guarantee Fee in full, or partially, at closing, you will select the checkbox to reflect A portion or more of the Guarantee Fee will be financed to input the dollar amount that will be financed into the loan amount. You may input $0 to exclude the entire Guarantee Fee from financing, or you may input a portion of the Guarantee Fee to be financed and pay the remaining balance at closing. In the example here, the borrower wishes to pay only a part of the $2,510 Guarantee Fee at closing (FYI when financing the Guarantee Fee, the calculation slightly increases to consider the full amortization over the life of the loan). By inputting $1,000 under Amount of Guarantee Fee Financed, the amount as input will be rolled into the loan amount, leaving the remaining balance of the calculated upfront MIP due and payable at closing under 1003/Transaction Details. Line g. will reflect the total amount of the upfront Guarantee Fee in the amount of $2,510. Line n. will reflect the dollar amount of the Guarantee Fee that will be financed and rolled into the loan amount. Line o. will reflect the total loan amount (base loan amount + any financed portion of Guarantee Fee)

14 4. VA MIP 1190 Winterson Rd., Suite 300 In the example below, the borrower s have requested a VA purchase with a base loan amount of $285,000 at 90% LTV; per the VA, these terms would require an upfront MIP factor of 1.5% ($4,275), and you will leave the Monthly MI section blank as this program will only require an upfront fee. In any VA financing scenario, the MI (FHA and VA) section will be completed as applicable, and specific to your borrower(s). In the scenario below, the entire upfront MIP will be financed. By leaving Amount Paid in Cash blank, the entire amount will populate under Upfront MIP/Funding/Guarantee Fee Financed. Loan Amount with Upfront MIP/Funding Fee will update to reflect the base loan amount + financed fee as input. Select the Done action button to apply the terms as input.

15 In the scenario below, the entire upfront MIP will be paid in cash at closing. By checking the Lock box, the Amount Paid in Cash field will open for editing. By inputting the entire dollar amount of the upfront MIP, the Upfront MIP/Funding/Guarantee Fee Financed will populate as $0 (blank), and the Loan Amount with Upfront MIP/Funding Fee will remain unchanged from the Base Loan Amount. Select the Done action button to apply these calculations.