80/20 loans

flexible · Joined: 18 Feb 2005 Posts: 2

I'm curious about information about 80/20 loans. Could you please tell me the pros and cons of using such a loan.

With the following example using todays current interest rates what would my payment be with a 80/20 loan compared to a convential loan. (if it helps my credit score is a 740)

1. 80/20 with a 5% down payment on a $260000 house

2. 30 year loan with 5% down payment $260000 house

The Mortgage-Pro · Site Admin Joined: 19 Jan 2005 Posts: 2248

You did not mention what kind of loan you wanted on the first 80%.

With Greenspan continuing to raise rates I would be cautious about taking out a second mortgage. 2nds are tied to the prime lending rate which has been raised six times and the prime rate is projected to continue on the updward trend.

If you did a straight 95% you would be high to mid 5's. If you wanted 100% financing I could get you a little over six with no mortgage insurance.

Please let me know if you have any more questions?

flexible · Joined: 18 Feb 2005 Posts: 2

What type of loan could I get that I would be able to finance 100% but not have to pay mortgage insurance? That would be something I would be very interested in.

The Mortgage-Pro · Site Admin Joined: 19 Jan 2005 Posts: 2248

You could get a 3/1 arm a 5/1 arm or a 30 year mortgage. Those are the most popular home mortgage types. I have e-mailed to discuss your mortgage options further.