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Monday, June 7, 2021
Report: Home Loans Backed by PMI Increased 53% in 2020
By Kerry Smith
The association representing private mortgage insurers (PMI) says the average Fla. buyer has a credit score of 739, a $58K annual income and buys a median $310K home. In 2020, 55% of Fla. first-time buyers relied on PMI to make down payments of less than 20%.
WASHINGTON – As home costs go up, more buyers need private mortgage insurance (PMI) because they make less than a 20% down payment. As a result, more buyers need PMI to secure a home of their own.
According to U.S. Mortgage Insurers’ (USMI) annual report, which includes a breakdown specific to Florida, it would take a Florida firefighter 28 years to save for a 20% home down payment ($46,073 annual salary), a middle school teacher 24 years ($56,113 salary), a registered nurse 19 years ($72,204 salary) and a veterinarian 15 years ($97,150 salary).
Florida borrowers with PMI in 2020
Over 40% of mortgage borrowers
130,800 homeowners in Florida
$276,232: the average loan amount of those with PMI
55%: Percentage of PMI users who were first-time buyers
746: Average credit score for PMI borrowers
Florida, Texas, California, Illinois and Michigan were the top five states for mortgage financing with PMI.
“Access to low down payment loans was more important than ever this past year as many homebuyers weighed other economic concerns during the pandemic,” says Lindsey Johnson, president of USMI. “Mortgage insurance levels the playing field and provides lower- and middle-income households with access to mortgage credit.” Johnson says the industry served more than 2 million borrowers last year, a “new milestone for our industry.”
It would take an average 21 years for a household earning the national median income of $68,703 to save for a 20% down payment (plus closing costs), for a $299,900 single-family home, the national median sales price.
The wait time is seven years with a 5% down payment mortgage with PMI.
In 2020, PMI allowed over 2 million more owners a chance to own their own home
Nearly 60% of PMI purchase mortgages went to first-time homebuyers, and more than 40% had annual incomes below $75,000.
The average loan amount purchased or refinanced with PMI was $289,482.
PMI supported $600 billion in 2020 mortgage originations – about 65% for new purchases and 35% for refinanced loans.
By year end, about $1.3 trillion in outstanding mortgages had active PMI coverage.