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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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80/20 Mortgage
Can someone please explain this to me, thanks!
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Posted 11/30/06 9:08 AM  |
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Prudential Douglas Elliman Real Estate
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: 80/20 Mortgage
the 20% is the down payment- it's a second mortgage
and the 80% is the first mortgage
the second is to aviod PMI- or mortgage insurance
it's a way to put no money down
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| Posted 11/30/06 9:12 AM |
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MikesWife
Wanting...........
Member since 1/06 6887 total posts
Name:
Karen
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Re: 80/20 Mortgage
The home buyer takes out two loans -- the first for 80 percent of the purchase price, and the second for 20 percent of the home's price. The borrower is expected to come up with the closing costs.
It is done as either (a) way to avoid paying mortgage insurance or (b) allows people to buy with little to no downpayment - or both.
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| Posted 11/30/06 9:13 AM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: 80/20 Mortgage
How do you get both mortgages? Is it done through the same bank?
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| Posted 11/30/06 9:26 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: 80/20 Mortgage
Posted by JandJ1224
How do you get both mortgages? Is it done through the same bank?
you get them at the same time- I would assume by the same bank -
I can ask my DH -when he wakes up and gets to work around 12pm
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| Posted 11/30/06 9:28 AM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: 80/20 Mortgage
THanks Beth,
Also are both loans fixed rate?
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| Posted 11/30/06 9:30 AM |
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MikesWife
Wanting...........
Member since 1/06 6887 total posts
Name:
Karen
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Re: 80/20 Mortgage
Posted by JandJ1224
How do you get both mortgages? Is it done through the same bank?
Yes. You would close on both on the same day. (The second mortgage - the 20% is at a higher interest rate than the first)
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| Posted 11/30/06 9:32 AM |
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MikesWife
Wanting...........
Member since 1/06 6887 total posts
Name:
Karen
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Re: 80/20 Mortgage
Posted by JandJ1224
THanks Beth,
Also are both loans fixed rate?
Generally, yes. As stated above, it is at a higher interest rate.
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| Posted 11/30/06 9:32 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: 80/20 Mortgage
Posted by MikesWife
Posted by JandJ1224
THanks Beth,
Also are both loans fixed rate?
Generally, yes. As stated above, it is at a higher interest rate.
the 20 is higher then the 80
but in a few years you should be able to re-fi and combine them into 1 loan
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| Posted 11/30/06 9:58 AM |
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bikramaddict
mommy-to-be
Member since 8/06 4376 total posts
Name:
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Re: 80/20 Mortgage
You can get a fixed or an ARM for the second one. I suggest fixed.
I'm doing an 80/20 and in order to do so, you need to give some sort of down payment when you go into contact. I gave 10K. You get it back at closing but there needs to be money put into escrow. The seller's attorney most likely won't let the seller sign papers if there's no escrow money.
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| Posted 11/30/06 9:58 AM |
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SweetTooth
I'm a tired mommy!
Member since 12/05 20105 total posts
Name:
Lauren
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Re: 80/20 Mortgage
Posted by JandJ1224
How do you get both mortgages? Is it done through the same bank?
Ours is through different banks. I think we are actually doing a 75/25, it worked out better for us. The interest rate on the second mortgage is higher than the first.
ETA: they are both fixed rates
Message edited 11/30/2006 10:15:22 AM.
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| Posted 11/30/06 10:15 AM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: 80/20 Mortgage
How much higher is the second rate? If you don't mind answering...
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| Posted 11/30/06 11:29 AM |
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Hi-Fi55
12 years...wow....
Member since 2/06 2984 total posts
Name:
Dianne
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Re: 80/20 Mortgage
The don't have to be fixed. They can be both be adjustable or only 1 or both can be fixed. The banks can be the same or different.
Depending on your credit score, that is how that rate is based. But is usually varies about a 2-3% difference.
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| Posted 11/30/06 11:36 AM |
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LuckySV
LIF Adult
Member since 10/05 4675 total posts
Name:
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Re: 80/20 Mortgage
Posted by MikesWife
Posted by JandJ1224
THanks Beth,
Also are both loans fixed rate?
Generally, yes. As stated above, it is at a higher interest rate.
It's actually not always at a higher rate. Both our loans are fixed at the same rate.
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| Posted 11/30/06 11:40 AM |
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SweetTooth
I'm a tired mommy!
Member since 12/05 20105 total posts
Name:
Lauren
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Re: 80/20 Mortgage
Posted by JandJ1224
How much higher is the second rate? If you don't mind answering...
Its about 2% more than the first loan.. but of course, its for less money also.
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| Posted 11/30/06 11:56 AM |
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bikramaddict
mommy-to-be
Member since 8/06 4376 total posts
Name:
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Re: 80/20 Mortgage
Posted by SweetTooth
Posted by JandJ1224
How much higher is the second rate? If you don't mind answering...
Its about 2% more than the first loan.. but of course, its for less money also.
Mine too.
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| Posted 11/30/06 1:46 PM |
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