GE Capital Mortgage Insurance Co. and Mortgage Guaranty Insurance Corp. are both cutting their premiums for refinancings and offering to insure loans with no down payments.
Since October, Milwaukee-based MGIC has reduced premiums 5 basis points for refinanced loans. "It's a recognition of what the refi loan represents - a borrower with a proven track record," said a company spokesman.
GE Capital's Raleigh, N.C.-based mortgage insurance unit announced plans to do the same Wednesday.
In the no-down-payment programs, the lender or a housing authority pledges 3.1% of the value of the home as extra collateral. The lender then makes a 100% loan-to-value loan, and MGIC insures 100% of that-or 97% of the total collateral.
-Marc Hochstein