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United Wholesale Mortgage (UWM) announced on Wednesday that it’s offering a conventional cash-out loan product with a loan-to-value (LTV) ratio of up to 89.99% and no mortgage insurance. The announcement comes after interest rates have dropped and competition for refinances has increased.
According to Michigan-based UWM, borrowers are historically limited to 80% LTVs for cash-out refis and often require mortgage insurance for loans that exceed this limit. The new product, dubbed Conventional Cash-Out 90, allows borrowers to tap into an additional 9.99% of their home’s equity without the coverage, the company said.
The offering has some limitations. It’s available for borrowers with a minimum FICO score of 680 and on primary homes with 30-year fixed terms.
In addition, loan amounts cannot exceed conforming limits. The baseline conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac in 2024 was $766,550. Recently, some lenders have increased it to more than $800,00 ahead of an official announcement expected in November.
UWM said the product helps “homeowners take full advantage of today’s record-high home equity.” Meanwhile, mortgage brokers gain “a significant competitive edge over banks and retail lenders who may either require mortgage insurance on similar loans or have stricter limits on how much cash a borrower can access.”
The new offering comes in the context of increasing competition for refinances. The 30-year fixed mortgage rate declined from a peak of 7.5% in May to the lowest point of 6.25% at the end of September. Since then, it has returned to the 6.5% range, according to HousingWire’s Mortgage Rates Center.
The Mortgage Bankers Association (MBA) estimates that amid lower rates, refis will reach $878 billion in 2025, four times the volume in 2023. Lenders and servicers are getting ready to attract borrowers.
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