80/15/5 Mortgage Loans
80/15/5 mortgage loans are also described as combination financing or
piggyback loans and offer a convenient way to provide creative mortgage financing in a purchase, refinance, or debt consolidation
transaction. In a purchase transaction, a second trust
is frequently used in combination with a first trust to avoid paying Private
Mortgage Insurance or PMI. The
first trust is always set at 80% of your purchase price which eliminates the
need for PMI. We add a second trust of 15% of the purchase price and you supply
5% cash. You have a wide range of mortgage options on this 80/15/5 loan, including fixed
rate or arms. Also,
interest only 80/15/5 mortgage loans are often
available as well. Several advantages to
consumers using this 80/15/5 mortgage approach include:
However, there are some potential problems with the strategy.
Your second trust may include a prepayment penalty - Our
programs do not
Depending on the rate on your second your total payment may
actually be more. Send me an
your anticipated sales price and I will be happy to run Good Faith Estimates
comparing both approaches for
Second Trust Ratios A second mortgage or second trust is a loan secured by your property
which takes second position to the first mortgage. A
second trust carries a fixed interest rate for the life of the loan and
amortization periods range from 5 to 20 years with a great new product amortized over 30 years
with a balloon due in 15 years.
The longer amortization period lowers your monthly payment significantly. Generally,
your total debt ratio should not exceed 45% of your monthly pretax income.
Depending on credit scores, an interest only
HELOC may also be available to you as well
I have included a page on how to calculate your
80/15/5 mortgage loans qualification ratios.
I have included a page on documentation
We offer you the ability to qualify and close into several
unique programs which accommodate borrowers with non traditional income or asset
situations. Please visit my No Docs
page for additional information on a No Documentation Second Trust.
Read more about 80/15/5 mortgage
I have an article "Buying
your home in 2008" by email explaining negotiating strategy in today's
Certified Mortgage Planning
Specialist, I offer an analysis of
your situation today can make suggestions on how small changes in how
your debt is structured today can have a life changing effect in the years
to come. Read more
about this free, no obligation service.
Prequalify for your 80/15/5