omeowners “Smarting” Your Way Toward A Better Mortgage (NAPSA)—In recent years, low interest rates and creative home financing have helped create a generation of new homeowners, pushing the U.S. homeownership rate up to an all-time high of 75 percent. But the recent and steady rise in interest rates and “rate resets” for many adjustable-rate, low-payment mortgages is now cause for broad, national concern. The federal government, in an attempt to curtail use of these loans among buyers who might be trapped by an unexpected spike in monthly payments, has issued new guidance for lenders offering nontraditional mortgages. Fortu- nately, less-risky mortgages that feature low down payments and low monthly payments arestill available. 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 ofa turbulent mortgage are primarily the ones we see using the Single Premium solution. It offers the lowest monthly paymentof 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, Mortgage Insurance = Lowest Payments $1,213 $1,146 $981 $1,026 10% down payment L_] Single Premium Piggyback 100% financing Loan Based on $166.667 property value. All interest rates hased on a 30-yr fixed first mortgage.Single Premuim Mortgage Insurance is rolled into the first mortgage. Piggyback loan is a 15-yr closed end second mortgage. Sources: Lender Rate Surve SmarterMf.com. @ which stays fixed when combined with a fixed-rate mortgage, is also available to borrowers with lessthan-perfect credit. As a bonus, if the value of the home appreciates enough to cancel the insurance within thefirst 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.
