Can someone explain to me what 80/10/10 means?
Thanks! I know it has to do with morgages.
Member since
Can someone explain to me what 80/10/10 means?
Member since
Re: Can someone explain to me what 80/10/10 means?
in the past it was very normal for 20% to be the standard down payment.
If a buyer did not have this equity, the bank would require the buyer to have insurance (PMI) to make sure that s/he did not default on the loan...since they did not have as much invested...
today, banks are much more liberal on down payment %...but PMI still exists...So banks will offer an 80% mortgage and then also a 10% second mortage (or other combination to make what you have to put down)
so you get 2 loans 80/10 and then you put down 10% 80/10/10 (you can also do this is you want to keep some cash on hands...we were lookingat a fixer upper - we had the 20%, but we wouldn't have any cash to fix it up...so we were going to opt for an 80/10/10 - we didn't get the house though)
you may be able to get 1 or both of the mortgages 'interest only' - this will help lower your monthly payment (since having 2 mortgages can be daunting) in the first 2 years...most of the payment goes to interest anyway...
a mortgage broker can really help you look at all of your options...
hope this made sense
If a buyer did not have this equity, the bank would require the buyer to have insurance (PMI) to make sure that s/he did not default on the loan...since they did not have as much invested...
today, banks are much more liberal on down payment %...but PMI still exists...So banks will offer an 80% mortgage and then also a 10% second mortage (or other combination to make what you have to put down)
so you get 2 loans 80/10 and then you put down 10% 80/10/10 (you can also do this is you want to keep some cash on hands...we were lookingat a fixer upper - we had the 20%, but we wouldn't have any cash to fix it up...so we were going to opt for an 80/10/10 - we didn't get the house though)
you may be able to get 1 or both of the mortgages 'interest only' - this will help lower your monthly payment (since having 2 mortgages can be daunting) in the first 2 years...most of the payment goes to interest anyway...
a mortgage broker can really help you look at all of your options...
hope this made sense
