Lenders using Fannie Mae's new Startup Mortgage to home buyers will be offered favorable mortgage insurance pricing from GE Capital Mortgage Corp. with MI rates that will cost consumers just few dollars more per month than a standard conforming loan.
Built around modifying a home buyers monthly mortgage payment, the Startup Mortgage allows buyers to initially pay only the interest due on the loan, while putting off payments on the loan principal for the first year. The monthly payments would then increase by 2% each year until the payment is sufficient to pay off the loan for the remaining loan term, typically four to eight years. The program is being offered through all Fannies seller/servicers.
Under GEs favorable pricing plan, a borrower would pay only about $3 more a month for MI on the Startup Mortgage than for a standard, fixed-rate mortgage based on a $100,000 loan. GEs rates are currently available in Illinois and California, and are pending regulatory approval in other states.
