luvsun27 - I am not sure what you mean about the 80/10/10?
The way ours works is that we put down 10%, take out a home equity loan for the other 10% and the remaining 80% is the mortgage. The 10% home equity line is at a higher interest rate, but it is less than PMI and the interest is tax deductible.
Valentinegirl - PMI is mortgage insurance that you must pay if you put down less than 20%. This is avoided with the the 80/10/10 program.
Yes...but they give you your payment based on the minimum payment to pay back the home equity loan...and they call it interest only. This way...if you only pay your minimum payment...when the life of the home equity loan is up...you have to pay the principle. For example...let's say the mortgage payment is 1,000 and the home equity payment is 200 (interest only). Your mortgage payment is then $1200. If you don't pay more than the $1200/month...you never touch the principle on the home equity loan...when it's up in 10 years...you will owe the balance. So...in essense you would have to pay at least $1500-2000/month to get anywhere. Make sense?
I just didn't want to have to rely on myself to make the extra payment. I would rationalize it that since I didn't have to pay $2000, I'll pay the $1200 this month and use the rest for something else. Hope that helps.
dgtlsunshine
Posted:
Member since
Re: How do you do it????????
Yeah they do that. Which I find strange. My mother took out a home equity line of credit and was completely confused.
She called me she said this doesn't make sense I pay and the principal has not moved. I then called in and realized that they give you a payment of ONLY interest. You have to decide to pay more to actually end up paying off the loan.
yabbobay
Posted:
Member since
Re: How do you do it????????
you can get both 80 and 10 loans interest only...but you don't have to...or you can just do the 10 - interest only....
also - depending on your profession...there are banks that will help you out...
like a few years ago Bank of America was offering 100% to teachers...
but I am sure...doctors, nurses, fire, police, etc...have similar deals...
also depending on your degree there are loan offers...DH is in IT (no degree) and our loan officer said that if he had had a IT degree that he could have qualified for a certain loan...
Crisco718
Posted:
Member since
Re: How do you do it????????
My 80/10/10 is not interest only. We will be paying both the interest and the principal balance. I think this is a better idea than PMI which is not tax deductible.
susans
Posted:
Member since
Re: How do you do it????????
We took out an 80/10/10 and it's not interest only either. Plus DH pays a lot more than we have to on that one so it'll be paid off much earlier than planned. With interest rates the way they were, it was worth it to buy when we did (about 1 1/2 years ago). If we had waited any longer, we would have been priced out of the area we were looking in.
