In late November, the Mortgage Bankers Association (MBA) predicted a difficult year for mortgage originators. MBA’s forecast team predicts economic uncertainty next year will lead to a 12% decrease in total mortgages ($1.98 trillion) in 2023.
This year’s series of rate hikes mean that budget-conscious borrowers are hyper-focused on the best deal. Other would-be homebuyers are feeling shut out of the market altogether. What are your strategies for reaching out to these valuable customer segments in the coming year?
Arch MI offers two resources to help you compete effectively on rates and enable first-time homebuyers to purchase with lower down payments.
According to a recent Zillow survey, 65% of respondents said mortgage loans require down payments of 15% or more. The reality is that down payments for first-time homebuyers average just 7%.
Discover the Deal Saver
Win the interest-rate wars with RateStar BuydownSM. When borrowers are aggressively shopping rates and yours isn’t the lowest available, you need all the flexibility you can get to save the deal.
RateStar Buydown is a unique tool that gives lenders the ultimate flexibility — by creating options that benefit borrowers as much as a lower interest rate. You can customize a lower MI premium for each borrower using RateStar Buydown’s easy slider tool:
- Buy down the MI premium using a gift, grant or homebuyer funds.
- Lower the PITI to mitigate a slightly higher interest rate.
- Allow more loans to meet DTI requirements for GSEs’ AUS approvals.
Eliminate potential dealbreakers and close more loans with RateStar Buydown, the Deal Saver. Attract new homebuyers and strengthen existing relationships with your borrowers by logging onto the RateStar Portal to show them the different MI scenarios that can help save them money over the long term.
RateStar Buydown is a unique tool that gives lenders the ultimate flexibility — by creating options that benefit borrowers as much as a lower interest rate.
Explore Low Down Payment Options with MIHome from Arch MI
Down payments remain a major hurdle that discourages many renters from becoming homebuyers — even though the amounts involved are more manageable than they think.
According to a recent Zillow survey, 65% of respondents said mortgage loans require down payments of 15% or more. The reality is that down payments for first-time homebuyers average just 7%.
Marketing affordable mortgages with extremely low down payments to this group is the way to win their business. You can structure the loans with mortgage insurance and the flexible options available with MIHome from Arch MI.
When you insure eligible loans with Arch MI, you can approve down payments as low as 3% of the purchase price. When you insure them with Arch Mortgage Guaranty Company (AMGC), homeownership is possible with even lower down payments. In many cases, a low down payment means renters can become homebuyers using only their existing savings.
Affordable Down Payments Add Up to Approvals
Comprising our full range of solutions, products and resources aimed at helping you structure and insure low down payment loans, MIHome from Arch MI has everything lenders need to attract, originate and close this valuable purchase business:
- Flexible Arch MI guidelines that work with down payments as low as 3%; gifts and grants allowed.
- AMGC Community Programs allow 1% and even 0% down payments for eligible borrowers; gifts and grants are allowed.
- Competitive MI pricing with RateStar® and customized premium payments with RateStar Buydown.
Nationally, the median rent for two-bedroom apartments was $1,901 in October — 24.7% higher than in 2019, according to Realtor.com’s Rent Report. MIHome gives you the tools to help Millennials solve down payment challenges and escape future rent increases.
Visit archmi.com/MIHome now to learn more about the flexible options available with MIHome from Arch MI.
I also invite you to visit our LO Toolbox for additional resources, ranging from our new Spanish-language borrower materials to online homebuyer education programs that are GSE-approved for borrowers seeking HomeReady® and Home Possible® mortgages.
Our most recent Insights Blog also flagged how you can prepare for 2023 by accessing the latest data and analysis in our weekly HaMMRSM Digest authored by our expert economics team. We also offer scores of complimentary live webinars and on-demand video courses on topics ranging from improving your social media to winning business from self-employed borrowers.
As the year closes, the Insights blog welcomes your thoughts and comments on meeting current challenges and your outlook for the year ahead. Insights is designed as an interactive forum, so please send your thoughts in an email. We may share them in a future post.