I had to take the spaceship in the other day for some regular maintenance. I’m good with technology and all, but the mechanics of a quantum capacitor are more than my alien cranium can process. For example, I was told I needed to replace the rotator splint on the thrust ignitors so that I can get maximum output from the ion engines. My eye stalks wilted at that point as I pulled out some credits to pay for it.
Since I only deal with spaceship mechanisms once every lunar year or so, I’ve learned to trust the experts to let me know what is best for the ship. The same can be said of mortgages, which is why members invest so much trust in their credit unions to assist them with home ownership. But do you—the credit union—know all the ins and outs of every component of a mortgage? While working knowledge is certainly there, we still need experts in some of the specific mortgage-related areas to help us out. Mortgage insurance is a perfect example.
I’m excited to work with MGIC, one of our Platinum Sponsors for the 2021 myCUmortgage Partner Conference, as they provide some interesting insights into mortgage insurance, from the basics to potential cash flow solutions for members.
One way they’re doing this is through the Nov. 30 webinar, “Mortgage Insurance Basics with Elizabeth Martin.” If you’re a myCUmortgage partner credit union, be sure to sign up in your Smart Rooms for this practical webinar that will help you get acquainted—or reacquainted—with mortgage insurance.
MGIC also provided us with the following guest post from Vance Edwards titled, “How to Save More Deals and Offer More Options to Homebuyers.” I learned so much from this post and know that you will too, all for the betterment of your member relationships. Enjoy!
———
Most would not consider my wife and I stereotypical private mortgage insurance users. After all, we’re not purchasing our first home. This will be our fourth. With our children grown—one away at college and one already graduated—we decided the time was right to downsize.
Which is what we’ll being doing this fall. And although we are fortunate enough to have the option to make a down payment of more than 20%, we’ll be using private mortgage insurance (MI). If that seems unusual, it may be time to rethink your MI strategy.
Throughout our most recent homebuying experience, I was able to show both our real estate agent and loan officer a few ways to use private MI as a strategy to overcome the challenges of today’s market as well as expand our cash flow options.
Overcoming a low appraisal
It took us a while to find a home on which we were willing to put an offer. Knowing that 2021 was a strong seller’s market, we realized we’d have to go beyond the listing price if we wanted to buy the home. Which led to a discussion with our real estate agent about the appraisal and how it could come in lower than our offer.
I have no idea how many times she has patiently explained this scenario to her clients, however based on her reaction, I’m guessing it was the first time she had a client respond, “Yeah, we don’t need to worry about that. It’ll be fine either way.”
Don’t get me wrong: I wasn’t hoping for a low appraisal. But I knew private MI could help us solve the problem if it arose, having spent the summer conducting webinars with my co-worker and friend Kevin Hearden, MGIC Product Development Director, showing mortgage professionals how to overcome a low appraisal.
As I explained this MI solution to our real estate agent, it became very clear it was a new idea to her—one that could solve an issue her clients were facing a lot lately. So, if you are looking for a way to stand out with your referral partners, this MI Solution may be one to consider sharing with them.
Expanding our cash flow options
I don’t know if that first appraisal came in low or not. Like many homebuyers in 2021, our offer wasn’t selected on the first home we tried to purchase. But eventually we found the home for us, and our offer was chosen over 7 competing offers.
Once again, we found ourselves taking advantage of an MI strategy that seemed new to the professional helping us. This time it was our loan officer, who was surprised we weren’t putting 20% down or planning to use the proceeds from the sale of our current home to pay down the loan to get to 80% LTV.
I explained to our loan officer how MGIC MI could provide cash flow options to allow us to make some immediate improvements to our new home. We want to convert the fireplace from natural to gas, retile the shower and do some landscaping. Rather than add these projects to a “someday” list, private MI Solutions will help us tackle them immediately.
True, our monthly mortgage payment will be higher than if we put 20% down or paid down the loan. But as I showed our loan officer, using the difference in that monthly payment, it would take us 15 years to save up the extra money we were able to access today, thanks to MGIC MI. (Learn more about how putting down 15% instead of 20% may have advantages for borrowers.)
“I’m not just the owner, I’m a client!”
Has everyone seen that classic Hair Club commercial? Perhaps it’s because I work for MGIC, founder of today’s private mortgage insurance industry, that I understand these purchase strategies. Here at MGIC, we know first-hand that private MI offers solutions for all kinds of borrowers and all kinds of challenges. MI helped many of us buy our first homes—and our second, third or fourth homes.
And all those borrowers out there who don’t work for MI companies (so, most of them)? They need your expertise to find the right loan solution for their specific situation. So, make sure MI Solutions are part of your strategy!
Vance Edwards, CMB, MGIC Marketing Program Director
Vance Edwards joined MGIC in 1999 and currently serves as MGIC’s Marketing Program Director. Among Vance’s responsibilities is heading up MGIC’s Marketing Promotions Team which oversees MGIC sales training efforts, marketing of MGIC programs and co-branding efforts with MGIC customers. In addition, Vance leads MGIC initiatives with Realtors® and consumers, especially first-time homebuyers. He has spoken numerous times to Realtors and loan originator audiences on topics including: first-time homebuyers, QM, economic overview, mortgage industry and sales skills. Vance lives in Menomonee Falls, Wisconsin with his wife Carrie and children Hailey and Trevan. Vance is a certified FICO® professional and earned a Certified Mortgage Banker (“CMB”) designation from the MBA.
Click Here to view the original blog post.