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80/15 mortgage loans sometimes
called a Piggy-Back loan, is a program designed to help
Borrower's purchase a home with 5% down while avoiding
Mortgage Insurance. An 80/15 loan is actually 2 mortgage loans, a
1st mortgage (at 80% of the value of the home) and a 2nd
mortgage (at 15% of the value of the home.)
80/15 loans eliminate the need to pay Private Mortgage Insurance
(also known as PMI) and also generally provide considerably
lower rates than other types of 95%-97% financing. 80/15 financing
helps to keep your payments low and gives you the freedom
of not having to put any money down.
- Choose a fixed rate, 5/1 ARM or 7/1
ARM for 80% of your financing.
- We will attach a second mortgage
to finance the remaining 5, 10 or 15%.
- We will underwrite both loans at
the same time.
- Fees are minimal on the second mortgage
loan.
- 80/15/5 purchase and refinance transactions available
- 80/10/10 also available.
An alternative to 80/15 mortgage is a 97% loan. To avoid
paying for the Private Mortgage Insurance (PMI), Ameristar
Mortgage offers
LPMI
(Lender paid PMI). This type of loans is comparable
to an 80/15 loan. The advantage is that you pay for only
one mortgage and you can finance up to 97% of the value
of the home. The disadvantage is that the interest rate
is always higher than the loans with PMI. Contact us to
find out more about the 97% loan with LPMI.
An 80/15 or 80/10 mortgage is also a good option to consider for
those who plan to put 10% to 15% down. If you compare
the difference in the payment of doing an 80/15 loan as
opposed to putting down 10% the difference in payment is
not much and you may prefer to keep the 5% as reserves for
an emergency.
You won't have to pay mortgage insurance!
The way to avoid paying mortgage insurance is by getting
a "piggyback loan" -- a second mortgage to back up the
first mortgage. The first and main mortgage is for 80
percent of the home's price. The piggyback loan is for
15 percent
of the home's price. If you see mention of an 80-10-10 loan,
it means that the borrower got a main mortgage of 80 percent
of a home's purchase price, a piggyback loan for 10 percent,
and made a 10-percent down payment.
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and
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