If you are a prospective homeowner wanting to secure financing to purchase your home but do not have the 20 percent down payment required by most mortgage lenders, an 80/20 mortgage could be your answer. Here is what you need know about financing your home with an 80/20 mortgage loan. In many parts of the country the average price for a home has gone up significantly over the past few years. This makes it difficult for many people to qualify for the financing they need using a traditional mortgage lender. Many of these individuals have turned to 80/20 mortgages to secure 100 percent of the mortgage financing they need. What is an 80/20 Mortgage? An 80/20 mortgage is actually two loans. You will have a first mortgage for 80% of your homes value and a second mortgage for the remaining 20%. By using this 80/20 mortgage you will avoid paying Private Mortgage Insurance which can add hundreds of dollars to your monthly mortgage payment. In addition to your 80/20 mortgage some lenders offer financing for 103% of the asking price on your home. This allows you to finance your closing costs and minimizes the cash you will need out of pocket to close on your home. How to Get an 80/20 Mortgage A good place to start shopping for an 80/20 mortgage is a mortgage broker. Mortgage brokers have access to a variety of unconventional mortgage lenders and programs to help get people qualified to purchase their homes. If you use a mortgage broker be sure to shop from a variety of offers and read all of the small print. You will need to do your homework to avoid overpaying for your mortgage. To learn more about your mortgage options and how to avoid common mortgage mistakes that can cost you thousands of dollars, register for a free mortgage guidebook using the links below. |
