PHILADELPHIA, July 25 /PRNewswire-FirstCall/ -- Homebuilders looking for
ways to grow their businesses and strengthen customer relationships can now
turn to SplitEdge(SM), a new product from Radian Guaranty Inc. that lets
homebuilders reduce a homebuyer's monthly mortgage insurance (MI) payment.
Traditionally, homebuyers with less than a 20% downpayment purchase
mortgage insurance in order to secure a mortgage loan. The homebuyer typically
pays for the insurance through monthly installments. With SplitEdge,
homebuilders can provide homebuyers with a one-time, refundable upfront MI
payment -- which can be .75%, 1.00%, or 1.25% of the total mortgage loan --
that significantly lowers the monthly MI installments that the homebuyer must
pay.
In today's increasingly competitive new-housing market, homebuilders are
using a number of strategies to gain customers, including discounts, upgrades,
amenities, and a host of other concessions. SplitEdge gives homebuilders
another concession for homebuyers, one that provides financial value for
months or years. Also, by making mortgage insurance a more-affordable way to
get a mortgage, SplitEdge represents a less-expensive alternative to other
solutions such as piggyback loans.
"SplitEdge reflects Radian's continued commitment to bring innovative,
valuable products and solutions to the nation's housing market," said Doug
Rossbach, Radian's senior vice president, Strategic Initiatives. "For
homebuyers, this creative mortgage insurance product eliminates the potential
risk of balloon payments associated with other mortgage loan options such as
80-10-10s and 80-20s, known as piggyback loans. We're also helping borrowers
save money on the interest paid over the life of a piggyback. By sharing the
MI cost, homebuilders can help homebuyers get the house they really want."
SplitEdge meets the needs of homebuyers who are purchasing new
construction, have a zero to low downpayment, have average or above-average
credit, and who are looking for ways to lower their monthly payments. For
example, assuming a home sale price of $254,756 with a 5% downpayment, a 6%
rate, and 1% upfront MI premium payment, a homebuyer can lower the monthly MI
payment to $44 from $157 when compared with traditional borrower-paid mortgage
insurance. In addition to enabling homebuyers to make lower monthly MI
payments, SplitEdge can help them qualify for larger loan amounts and,
therefore, higher value homes.
Although the product initially caters to the business needs of
homebuilders, SplitEdge allows any approved third party -- including lenders,
credit unions, homebuilders, even family members -- to provide the upfront
payment toward the MI premium.
"The upfront payment can come in the form of concessions from almost
anyone involved in the homebuying process," said Rossbach. "It can be
incorporated into the overall MI balance to lower the homebuyer's monthly MI
payment or to help them qualify for a higher-value home. It's a product that's
designed with the needs of a dynamic housing market in mind."
About Radian Guaranty Inc.
Radian Guaranty Inc. is the mortgage insurance subsidiary of Radian Group
Inc. (NYSE: RDN), a global credit enhancement company headquartered in
Philadelphia. Radian Guaranty provides risk management products and services
to mortgage lenders nationwide; these services increase opportunities for
people to buy homes with little or no downpayment, protect lenders from
default-related losses on residential first mortgages and facilitate the sale
of low-downpayment mortgages in the secondary market. Additional information
may be found at http://www.radian.biz.
SOURCE Radian Guaranty Inc.
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Related links:
http://www.radian.biz
CONTACT:
For investors: Mona Zeehandelaar,
+1-215-231-1674, email: mona.zeehandelaar@radian.biz; or for the
media: David Cheung, +1-215-231-1362, email:
david.cheung@radian.biz, both of Radian Guaranty Inc.
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