MGIC’s MI Options Calculator

Loan Information | Loan Options | Eligibility Settings | Results Tables

MGIC's MI Options Calculator enables you to compare up to four high-LTV loan options side-by-side. Field and results definitions are below.

Note: Symbols like dollar signs ($), percent signs (%) or commas (,) are considered invalid. Use numbers only when completing fields.

Loan Information

Purchase Price or Market Value ($)

Enter the price or value of your subject property.

1st Lien Type

Choose the type of loan program that will be in 1st lien position.

Purpose of Loan

Selecting Purchase or Rate and Term Refi will impact the MI premium rates that auto-fill in the Loan Options section.

Credit Score

Enter the loan's Indicator Credit Score, from 0 to 999.

Debt-to-Income

The DTI ratio compares the borrower's total monthly obligation to total monthly gross income. When qualifying your borrower for MGIC mortgage insurance or calculating premium, note that we do not require you to include the mortgage insurance premium in the DTI calculation.

Annual Home Appreciation Rate (%)

Enter the annual percentage increase in the value of the subject property. If you enter a high appreciation rate, your analysis will show that the borrower will be able to cancel MI sooner. It will also show that the borrower will build more equity over time.

When does borrower plan to sell or refinance?

Choose the number of years into the future that you want to analyze. For example, if you choose 4 years, for each Loan Option the analysis will illustrate the estimated interest rates and monthly payments 4 years after closing, along with the borrower's level of home equity 4 years after closing.

Interest Rate Projection (for ARMs)

If any of your 1st mortgages or 2nd mortgages will have adjustable rates, this drop-down menu allows you to estimate how lending rates will move in the coming years. Your selection has the following impact on the analysis:

Increase gradually - For 1st mortgages, the rate will rise by 1% during the first year after the fixed-rate period, an additional .75% during the second year, and another .75% during the third year, maintaining that rate during all remaining years. For 2nd mortgages with adjustable rates, the rate during the first year after the fixed-rate period will be equal to a .5% per year increase since closing. Then, during the second year after the fixed-rate period, the rate will increase by .5%. Finally, the rate will increase by an additional .5% during the third year and maintain this level during all remaining years.
Increase sharply - For 1st mortgages, the rate will rise by 2% during the first year after the fixed-rate period, an additional 2% during the second year, and another 2% during the third year, maintaining that rate during all remaining years. For 2nd mortgages with adjustable rates, the rate during the first year after the fixed-rate period will be equal to a 1% per year increase since closing. Then, during the second year after the fixed-rate period, the rate will increase by 1%. Finally, the rate will increase by an additional 1% during the third year and maintain this level during all remaining years.
No change - For 1st and 2nd mortgages, the start rate will remain in effect for the life of the loan, regardless of whether your loans are fixed-rates or ARMs.

top

Loan Options

You may compare up to four high-LTV loan options side-by-side. Enter details in each of the Loan Option tabs.

Down Payment or Equity Position ($): For a purchase scenario: enter the dollar amount the borrower intends to put down.
For a refinance scenario: enter the dollar amount of home equity the borrower has, or choose to enter the LTV% (below).

OR
Total LTV (CLTV) (%): Enter the total Loan-to-Value ratio, from 1 to 100.

OR
Base Loan Amount: Enter the amount to be borrowed, excluding any financed MI premium.
Select Loan Option: Choose a financing structure from the drop-down menu.
1st Mortgage Interest Rate: Enter the starting interest rate for the 1st mortgage.

Financing Structure Options

Monthly MI

When you select Monthly MI, you have three rate options:

Standard Agency MI coverage is the default selection. The premium rate autofills based on the MGIC rate plan that is predominantly active nationwide, applying Fannie Mae and Freddie Mac's standard coverage requirements.
When you select the Home Possible^® / HomeReady™ or the HFA Preferred™ / HFA Advantage^SM radio button, the premium rate autofills based on those programs’ coverage requirements.
If you are analyzing any nonstandard scenarios, select Enter my own rate. Then enter your specific premium rate factor in the 'Monthly MI Premium Rate' field.

Split MI

In the Split Premium Plan drop-down menu, select one of the three up-front premium rates, expressed as a percentage of the loan amount, or Other. Selecting 0.75, 1.00 or 1.25 determines and autofills the Monthly MI Premium Rate field for you. If you select Other, you can manually enter the Up-front MI Premium Rate and a Monthly MI Premium Rate.

Then select one of the three Monthly MI Premium Rate options:

Standard Agency MI coverage is the default selection. The premium rate autofills based on the MGIC rate plan that is predominantly active nationwide, applying Fannie Mae and Freddie Mac's standard coverage requirements.
When you select the Home Possible^® / HomeReady™ or the HFA Preferred™ / HFA Advantage^SM radio button, the premium rates autofill based on those programs’ coverage requirements.
If you are analyzing any nonstandard scenarios, select Enter my own rate. Then enter your specific premium rate factor in the Monthly MI Premium Rate field.

You may also select one of two ways to reduce the total loan amount under Upfront Premium Paid at Closing (not financed):

Select In Dollars, and enter the dollar amount that will be paid toward the up-front MI premium. Entering a value here will reduce or eliminate the amount of premium that would otherwise be financed into the loan.
OR select In Points, and enter this value as a percentage of the loan amount.

Please Note: Many loan programs allow third-party closing cost credits. This means the up-front MI premium could be paid by a seller or builder instead of the borrower.

Single BPMI

When you select Single BPMI, you may specify Non-Refundable or Refundable. To learn about the difference, follow the link to ‘MI Premium Options’ or ‘Rate Cards’ found below the Notes section.

You have three Upfront MI Premium Rate options:

Standard Agency MI coverage is the default selection. The premium rate autofills based on the MGIC rate plan that is predominantly active nationwide, applying Fannie Mae and Freddie Mac's standard coverage requirements.
When you select the Home Possible^® / HomeReady™ or the HFA Preferred™ / HFA Advantage^SM radio button, the premium rates autofill based on those programs’ coverage requirements.
If you are analyzing any nonstandard scenarios, select Enter my own rate. Then enter your specific premium rate factor in the Upfront MI Premium Rate field.

You may also select one of two ways to reduce the total loan amount under Upfront Premium Paid at Closing (not financed):

Select In Dollars, and enter the dollar amount that will be paid toward the up-front MI premium. Entering a value here will reduce or eliminate the amount of premium that would otherwise be financed into the loan.
OR select In Points, and enter this value as a percentage of the loan amount.

Please Note: Many loan programs allow third-party closing cost credits. This means the up-front MI premium could be paid by a seller or builder instead of the borrower.

LPMI

When you select LPMI, enter the Mortgage Interest Rate.

FHA

When you select FHA, the Upfront and Monthly MI Premium Rate fields autofill, based on the LTV and Loan Program selected.

You may also select one of two ways to reduce the total loan amount under Upfront Premium Paid at Closing (not financed):

Select In Dollars, and enter the dollar amount that will be paid toward the up-front MI premium. Entering a value here will reduce or eliminate the amount of premium that would otherwise be financed into the loan.
OR select In Points, and enter this value as a percentage of the loan amount.

Piggyback Closed End and Piggyback HELOC

If you choose a piggyback financing structure as a loan option, you can customize the following fields:

1st Mortgage LTV - Enter the loan-to-value ratio (LTV) of the 1st mortgage here. It defaults to 80%, but in some cases (e.g., jumbo transactions) you may need to decrease the 1st mortgage LTV.
2nd Mortgage Interest Rate - Enter the starting interest rate for the 2nd lien mortgage here.
2nd Mortgage Fixed-Rate Period (months) - Enter the number of months until the first possible rate adjustment here. The default value for HELOCs is 6 months, because that is a common teaser rate scenario. The default value for closed-end 2nd mortgages is 180 months, reflecting a 30/15 balloon scenario.
2nd Mortgage Amortization Term (months) - Enter the number of months used in calculating the minimum required monthly payment here. The default number is 360, but, for example, if you are analyzing a 15-year 2nd mortgage, you can override the default and type in 180. HELOCs are assumed to be interest-only for their entire term.

top

Eligibility Settings

Under certain circumstances, where values entered in the calculator are outside of MGIC or FHA eligible program guidelines, you will receive a warning message stating so, and the MI Premium Rate field will fill as Unavailable.

For scenarios using MGIC Premium programs — LPMI, Monthly MI, Single BPMI or Split MI

These loan criteria will trigger the warning message:

3/1 or 1/1 ARM with LTV greater than 95%
Loan Amount greater than $700,000 with LTV greater than 95%
Loan Amount greater than $500,000 with LTV greater than 95% and Credit Score less than 720
All other scenarios with LTV greater than 97%
Any scenario with Credit Score less than 620

For Monthly MI, Single BPMI or Split MI, you can enter a premium rate manually to create a customized comparison.

For FHA scenarios

These loan criteria will trigger the warning message:

Purchase with LTV greater than 96.5%
Rate-and-Term Refi with LTV greater than 97.75%

For these circumstances, you can enter a premium rate manually to create a customized comparison.

The MI Options Calculator is not an underwriting tool.

It is a loan scenario comparison tool, programmed with only a few key eligibility rules, provided for use by mortgage professionals only. Although MGIC believes calculations to be accurate, results are not warranted and should not be relied upon for borrower qualification, MI eligibility, Agency acceptance, premium rates or amounts, monthly payments, home equity, or future home value.

top

Results Tables

Initial Monthly Payment and Rates

This data table highlights the figures that are most important to the average borrower.

MI Cancellability and Refundability

With regard to selecting Monthly MI, Single BPMI, Split MI or FHA as a financing option, this data table estimates the point in time at which a borrower might be able to cancel MI coverage, what the new monthly payment would be and how much a cash refund would be.

Note: Future Total Monthly Payment calculation is designed for fixed-rate scenarios and is not always accurate for adjustable-rate scenarios.

If the borrower has the property re-appraised, MI is cancellable:

between the 25th and 60th month, as soon as the balance reaches 75% of the re-appraised value
anytime after the 60th month, as soon as the balance reaches 80% of the re-appraised value

Note: Refundable Single BPMI allows for a pro-rated cash refund within the first 60 months. If the borrower sells the home or refinances before the estimated cancellation date, the refund amount would be greater than what is shown here.

In the case of FHA:

If the LTV at origination (prior to the financing of any UFMIP) is greater than 90%, MIP is not canceled until the loan is paid off, or 30 years, whichever comes first.
If the LTV at origination is less than or equal to 90%, MIP is canceled automatically after 11 years, or when the loan is paid off, whichever comes first.

Future Considerations

This data table paints a picture of the borrower's home financing situation at a specified time in the future. You can see how different mortgage programs affect future monthly payments and home equity accrual. Estimated Home Value is solely dependent on the Annual Home Appreciation Rate that you enter.

Note: Even though Property Tax, Hazard Insurance and Homeowners Association Dues can change, the entered values are held constant in this calculator and included in the future Total Monthly Payment.

top

HomeReady™ and HFA Preferred™ are trademarks of Fannie Mae.
Home Possible^® is a registered trademark of Freddie Mac.
HFA Advantage^SM is a service mark of Freddie Mac.