80/20 Mortgage

If you are a prospective homeowner wanting to secure financing to purchase your home but do not have the 20% 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.

What is an 80/20 Mortgage? An 80 20 mortgage sometimes called “no money down” morgage is actually two loans. You will have a first mortgage for 80% of your home’s value and a second mortgage for the remaining 20% of the value of the home to cover the down payment. By using this 80/20 mortgage you will avoid paying Private Mortage Insurance which can add hundreds of dollars to your monthly mortgage payment.

You can also greatly reduce your out of pocket expenses and get a possible tax deductions. 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. A reverse mortgage is an attactive option to rise cash.

How to get a no money down morgage? A good place to start shopping for an 80-20 mortgage is your trusted 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 borrowing options and how to avoid common mistakes that can cost you thousands of dollars, read more mortgage related articles on our site.