What does the 80/10/10 mortgage actually mean. I've seen it mentioned as an alternative to putting down 20%. Since having 20% to put down in the near future seems hopless I was looking for other ideas or suggestions.
alina
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Re: Can someone please explain this to me
You put 10% down, get a first motgage for 80% and then a 2nd mortgage (or a home equity line) for the remaining 10%...
I think the 2nd usually comes with higher rate, but not 100% sure.
Edited to add that effectifely you're borrowing 90% of the total home value, and are putting down very little equity...
Charly
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Re: Can someone please explain this to me
We just did this! We actually did an 80/15/5 since we are paying for our wedding we only have 5% cash to put down.
Our second mortgage (15%) is a line of credit. We chose interest only to keep the payments low. It has a variable rate, but since its secured by your home it is tax deductible. Just always make sure whatever mortgage you get - to ask for no prepayment penalities - that way when you have the extra $$ you can pay on the principle.
FM me if you need more details.
HappyEverAfter
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Re: Can someone please explain this to me
Posted by Oct04Bride
We just did this! We actually did an 80/15/5 since we are paying for our wedding we only have 5% cash to put down.
Our second mortgage (15%) is a line of credit. We chose interest only to keep the payments low. It has a variable rate, but since its secured by your home it is tax deductible. Just always make sure whatever mortgage you get - to ask for no prepayment penalities - that way when you have the extra $$ you can pay on the principle.
FM me if you need more details.
We did exactly the same thing, and 80/15/5 mortgage. Our second loan is also variable, based on prime rates but with a cap. We are working our butts off to pay this one off first, making double or more payments on the principle. I agree to make SURE that if you do this you do not have prepayment penalties. We also found that by doing this, we got a great rate on the bigger loan, which is fixed.
LIPrincess00
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Re: Can someone please explain this to me
I just wanted to add that when we went for our mortgage the person who we met with said that it is illegal in NY to have prepayment penalties. Just thought I would share this information.
Jenn524
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Re: Can someone please explain this to me
Those of you that did the 80/15/5 can you FM me which bank you went with? We're looking into this option right now. Thanks.
HappyEverAfter
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Re: Can someone please explain this to me
We went through a mortgage broker, but we are in CT so it may be different. I was also not thrilled w. the broker, he was a dumbas* who dragged out our closing, so I would not recommend him. Lots of places will do this now, but it depends on your credit-DH and I had very clean records, so it was not a problem. A friend had an issue where a bank/mortgage broker would not approve her with less than 10% down. When you go for mortgage approvals, shop around and tell them you want to put 5% down, they should be able to tell you if you can do it or not. We were actually approved with zero down, so it can be done.
