First-time Homebuyers Turn to PMIs with 3% Down Mortgages Spiking in Popularity
A new report shows that first-time homebuyers are turning to loans backed private mortgage insurance companies with heavy fourth quarter numbers. Genworth has linked the PMI influx to be in correlation with Freddie Mac and Fannie Mae's 3% down payment as a popular option.
"PMI carriers insured 157,000 loans for first-time homebuyers at the end of 2017, the best fourth quarter since 1994, due largely to more lenders and borrowers taking advantage of Fannie Mae and Freddie Mac's 97% loan-to-value mortgage programs," according to National Mortgage News.
"The most popular mortgage product for first-time buyers remains the Federal Housing Administration program, which insured 167,000 loans in 4Q17. But FHA volume decreased 8% year-over-year, even though the total number of first-time buyers during the quarter increased 4% year-over-year."
According to the report, Genworth believes this could spell bad news for the FHA program if it continues to trend higher in popularity. Meanwhile, the first-time homebuyer market has reportedly increased 40% in the past three years.
To learn more about about the spike in PMI backed loans and 3% down mortgages, click on the image above.