Second insurer unveils plan to cut closing costs.

Mortgage Guaranty Insurance Corp., Milwaukee, announced last week a premium payment plan that will enable borrowers to sharply cut closing costs.

The plan will allow consumers to pay only one month's mortgage insurance premium at closing, as opposed to the payment of a full year's premium heretofore been Mortgage Guaranty's standard.

Mortgage insurance is typically required on mortgages with down payments of less than 20%. It insures the lender for the difference between the actual down payment and 20%.

GE Capital Mortgage Insurance Corp., Raleigh, N.C., inaugurated a similar program in late June.

Under the program, borrowers will make monthly mortgage insurance payments as part of their monthly mortgage payment.

Mortgage Guarantee feels the program, which would be available to all its customers, could cut by up to 95% the amount of cash needed by consumers at closing.

GE's program is available only through lenders that have computer-to-computer access to GE Capital Mortgage.

Both Fannie Mae and Freddie Mac, the secondary-market agencies, have approved the program, which is expected to be available starting Sept. 1.

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