UPenn's Wharton School of Business, in conjunction with corporate dollars from Genworth Financial, has released its latest Mortgage Payment Index (I posted on the launch of this index back in March).
[The index] shows that both borrowers and lenders in 2007 have started a trend toward secure mortgages. Lenders have tightened underwriting guidelines and financed more loans for people with credit scores of 650 or higher. In January of this year more than 60 percent of all new mortgages were prime. Moreover, 89 percent of borrowers with one-year adjustable-rate mortgages refinanced into long term secure loans in the first quarter of 2007. Loans with private mortgage insurance have also spiked -- more than 55 percent -- in March over February. ... The following mortgages are featured in the new Index for June. The first amount reflects the payment on a $200,000 mortgage in month one, the second amount reflects the payment in month 61:
  • 30-year Fixed with monthly mortgage insurance: $1,400.31 / $1,270.31
  • 30-year Fixed with Single Financed Premium mortgage insurance: $1,309.05 / $1,309.05
  • Combo: 30-year Fixed and HELOC: $1,328.19 / $1,434.86
  • Combo: 30-year Fixed and Closed-End: $1,328.30 / $1,328.30
  • Combo: 10/1 Interest-Only ARM and HELOC: $1,203.02 / $1,309.69
  • Combo: Pay Option ARM and HELOC: $800.17 / $1,824.49
I'm amazed that PMI was used on 55 percent of loans, likely a reflection of higher interest rates -- and for some borrowers, the ability to deduct PMI premiums paid.