CFO Jerome Upton said the closed block’s fourth-quarter adjusted operating loss was driven by LTC, which posted an adjusted operating loss of $159 million. Upton attributed the LTC result to a liability remeasurement loss related to actual experience versus expected (A/E) and the net unfavorable impact of assumption updates. He said unfavorable LTC A/E of $124 million pre-tax was “driven primarily by higher claims and lower terminations in the capped cohorts.”CEO Tom McInerney said fourth-quarter results we ...

Core Insights - The combination of high home prices and elevated mortgage rates has significantly hindered homebuying for many Americans, with 66% of Gen Z and 59% of Millennials expressing concerns about future home affordability [2] Affordability Strategies - A popular strategy to improve affordability involves making a down payment of less than 20% to avoid private mortgage insurance (PMI), followed by renovations aimed at increasing home value to qualify for PMI removal [3][9] - However, renovations do not guarantee an increase in home value, and if appraisals do not align with the expected improvements, homeowners may incur renovation costs while still paying PMI [3][10] Financial Implications of PMI - PMI typically adds $30-$70 per month for every $100,000 borrowed, which can significantly increase monthly housing costs, especially for homes with a mortgage balance of around $344,660 after a 5% down payment [6] - The additional cost of PMI can detract from monthly budgets, limiting savings potential, which could otherwise accumulate to over $1,200 annually [7][8] Homeowner Sentiment - Homeowners are increasingly motivated to find strategies to eliminate PMI more quickly than waiting for their loan balance to decrease, as PMI is perceived as money spent without tangible benefits [8]

Core Insights - The increasing difficulty of saving for a down payment is highlighted, with 81% of aspiring homeowners in the U.S. citing down payment and closing costs as significant obstacles to homeownership [1] Group 1: Down Payment Insights - The traditional 20% down payment rule is discussed, emphasizing its benefits such as lower mortgage rates, increased chances of mortgage approval, and reduced monthly payments [1] - A down payment of 20% or more eliminates the need for private mortgage insurance (PMI), which is a significant financial advantage [1] Group 2: Private Mortgage Insurance (PMI) Details - PMI is typically charged as a monthly premium ranging from 0.46% to 1.50% of the total mortgage cost, protecting the lender in case of borrower default [2] - Once homeowners reach the 20% equity threshold, PMI should generally be canceled, but some may still incur charges, making it essential to understand mortgage documentation [3][4] Group 3: PMI Removal Process - There are two types of PMI: Borrower-Paid Mortgage Insurance (BPMI) and Lender-Paid Mortgage Insurance (LPMI), each with different removal processes [4] - BPMI can be removed by requesting the lender once the 20% equity level is reached, while LPMI requires refinancing to potentially lower the rate, with additional costs involved [5]

Core Insights - A higher savings rate accelerates wealth accumulation through increased investment and compound returns [1][2] Group 1: Benefits of High Savings Rate - High savings lead to additional financial advantages, reinforcing the idea that savings generate more savings [2] - Sufficient savings allow individuals to avoid private mortgage insurance (PMI) by making a 20% down payment, thus saving on unnecessary costs [3] - A larger down payment also results in lower mortgage rates, further reducing monthly payments [3] Group 2: Debt Management and Financial Health - Maintaining savings helps avoid interest on debts, breaking the cycle of credit card debt and other loans [4][5] - A strong savings position contributes to a higher credit score, which in turn leads to lower interest rates on loans [6] - With adequate savings, individuals may not need life and disability insurance, allowing them to invest the saved premiums for wealth growth [7] Group 3: Insurance and Emergency Preparedness - Individuals with substantial savings can opt for high-deductible insurance plans, as they can cover deductibles in emergencies [8]

Core Insights - A 20% down payment is considered the standard for home purchases, helping buyers avoid private mortgage insurance (PMI), but many lenders accept lower down payments, such as 5% [1][10] - The time required to save for a 20% down payment varies significantly by state, with the largest discrepancies found in Washington, D.C., and Hawaii, where the difference is 33 years, while Iowa has the smallest difference at 10 years [5][6] - While a 20% down payment can lead to lower interest rates and total interest paid, it may not be practical for all buyers, especially if it takes decades to save [7][8] Down Payment and PMI - PMI is a fee added to monthly mortgage payments for loans with less than a 20% down payment, serving as insurance for lenders against borrower default [2][3] - The cost of PMI can range from 0.20% to 2% of the original loan amount annually, with specific examples illustrating potential costs based on loan amounts [3][12] - PMI can be canceled once the borrower reaches 20% equity in their home or when the loan balance reaches 78% of the property's original value [4] Alternatives to 20% Down Payment - Many first-time home buyers put down significantly less than 20%, with the typical down payment in 2024 being only 9% [9] - Various mortgage options exist for lower down payments, including conventional loans with as little as 3% down, FHA loans with 3.5% down, and zero-down options through USDA and VA loans [11][13] - Down payment assistance programs are available through government agencies and some lenders, providing grants and loans to help buyers with upfront costs [13]