PMI Qualifications Question

[Anonymous]

I currently own my house (since 2005) and have good credit and an excellent FICO score - 780 the last time I checked and only "good" debt (house, car, a few credit cards but only one with about 1000 balance on it).  My fiance's scores are not as good (he currently rents his house from family and has very few open credit lines/installment loans).  We plan to marry in about a year, sell my house and use its equity towards a house together in an area which makes more sense for our life together.  I know that the equity in my current house will not be enough for a 20% downpayment on this new house.  Here comes my question:

What is needed to qualify for PMI.  I am certain that I will qualify but I am concerned about my fiance's credit.  We will be pulling his FICO scores this summer to see where we are as he paid off a medical collection bill early this year and we want to give it time to reflect that payment.  But I heard a rumor that PMI requirements have changed and that applicants need to have 3 open lines of credit (car loan, credit cards, etc.).  My fiance currently only has one credit card and one store card (Goodyear, I think).  The good news is that he has little to no debt and has a stable job history as he has been with the same company for 18+ years.  The bad news is that he may not have the developed credit history due to a bankruptcy several years ago. 

Can anyone tell me the criteria that lenders need for PMI approval?  I am hoping that by combining my good credit and established good history with his good curent financials will be enough.  One more note, we will probably not be married at the time of application and/or purchase of the house.  That is scheduled to happen later as we would prefer to invest in the house before paying any potential wedding bills.

Thanks!

[Anonymous]

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@Anonymous wrote:

I currently own my house (since 2005) and have good credit and an excellent FICO score - 780 the last time I checked and only "good" debt (house, car, a few credit cards but only one with about 1000 balance on it).  My fiance's scores are not as good (he currently rents his house from family and has very few open credit lines/installment loans).  We plan to marry in about a year, sell my house and use its equity towards a house together in an area which makes more sense for our life together.  I know that the equity in my current house will not be enough for a 20% downpayment on this new house.  Here comes my question:

What is needed to qualify for PMI.  I am certain that I will qualify but I am concerned about my fiance's credit.  We will be pulling his FICO scores this summer to see where we are as he paid off a medical collection bill early this year and we want to give it time to reflect that payment.  But I heard a rumor that PMI requirements have changed and that applicants need to have 3 open lines of credit (car loan, credit cards, etc.).  My fiance currently only has one credit card and one store card (Goodyear, I think).  The good news is that he has little to no debt and has a stable job history as he has been with the same company for 18+ years.  The bad news is that he may not have the developed credit history due to a bankruptcy several years ago. 

Can anyone tell me the criteria that lenders need for PMI approval?  I am hoping that by combining my good credit and established good history with his good curent financials will be enough.  One more note, we will probably not be married at the time of application and/or purchase of the house.  That is scheduled to happen later as we would prefer to invest in the house before paying any potential wedding bills.

Thanks!

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Not sure what you mean when you say PMI. PMI is an insurance and has nothing to do with approval for purchasing a home.

If you are applying together they will use the lowest middle score between both of you. If his scores are to low then IMO since your credit is good I would apply alone and just have his name on the deed.  Only thing is if the loan is defaulted on you would be the only responsible party they would come after for payment. This is something that would have to be thought about and understand the repercussions involved if the loan is not paid for. The only time this would not be true is if you live in a community property state, and in that case you would both be liable if you were married.

[Anonymous]

Good question and to the poster above, there are certainly much different qualification standards for PMI and loan approval. Everyday people are approved for hte loan only to have the PMI company deny the insurance. Unlike FHA loans, private mortgage insurance companies have their own standards seperate from the loan itself.

In my area, the PMI rate and approval has many tiers, and you have the option of paying it upfront at once, or monthly over the course of the loan. Upfront PMI is usually in the 1.9% range, but is dependant on LTV, credit, income and DTI. most PMI companies here are looking for minimum of 680 CS (lowest middle), with backend DTIs under 40%, and income varies by home purchase.

Your lender should tell you the qualifications they typically like to see.

[Anonymous]

PMI is still Insurance. Can be purchased through a few different carriers.

In there situation and the lack of future DW with enough credit they are best IMO to use an FHA loan. Also not having the 20% down is what would be the cause to purchase PMI. The difference in rates is not enough in my opinion to stay conventional and even possibly in their situation may be higher then FHA.

But I could be wrong as I have been known to do that every other day or so!!!!.. lol