Mortgage Broker Company - Need A Special Mortgage? 2

What is an 80-10-10 loan.

These are sometimes refered to as piggyback loans. They are used to creatively purchase your home. If you con not have a lot of cash, this loan allows you to qualify for a higher mortgage, with lower payments.

How does it work? You pay 10% down, get a loan for 80% of the purchase price, (this avoids you from having private mortgage insurance) then get a second loan for the remaining 10%.

Advantages? Your whole payment is tax deductable. You can alos pay off the second loan early (just make sure there are no pre-paymnet penalties) and therefore you are reducing your total payment.

Disadvantages are if current interest rates are high your second loan may actually make your total payment higher than if you used a traditional loan method. Usually rates on second mortgages will be about 2% higher and the term is usually 15 years.

Sharon