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Which one will be better for me 80/10/10 or 80/20?

blue · Posted: Fri Nov 11, 2005 2:44 pm Post subject:

Hi Dazy,

I feel 80/20 loan may be considered better if you want to avoid equity down payment.

80/20 loans allow you to go for a home purchase with no mortgage insurance, no equity down payment. You need to pay only closing costs.

In case of 80/10/10 loan you need not pay mortgage insurance but you have to pay 10% down payment and closing costs.

So, if you require 100% financing, you may go for a 80/20 loan.

Regards,
Blue

Samantha · Posted: Fri Nov 11, 2005 3:41 pm Post subject:

Hi Dazy,

Depending on the situation or need one may prove better than the other. Generally 80/10/10 loans are a good way to provide financing in a purchase, refinance, home improvement or debt consolidation deals.

If you have sufficient income and can make the 10% down payment on your purchase price you can take this option which is particularly good if you want to buy a new home before selling the old one.

If you require a 100% financing, then 80/20 loan is a very good option which enables the borrower to buy a home with zero down payments. But you should have a good credit profile to qualify for this loan.

Hope this information will help you.

God bless you.

For MortgageFit,
Samantha

Guest

What are the disadvantages of combined or piggyback loan?

Samantha · Posted: Fri Nov 11, 2005 4:39 pm Post subject:

Hi Dazy,

There are certain disadvantages for combined mortgage or piggyback mortgage.

One of the disadvantages is that it could take nearly 10 years to pay off your second loan.
Another disadvantage is that combined mortgage rates may be higher. That makes combined mortgage payments higher than a single mortgage payment with PMI. There may be pre-payment penalty on a combined mortgage.

For more on the discussed topics you can refer the following sections -

80-10-10 Loan

80-20 Loan

Piggyback Loan

God bless you.

For MortgageFit,
Samantha

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