
With rates so low, I have many clients looking into “80/10/10” financing, which stands for an 80% loan-to-value (LTV) first mortgage, a 10% LTV 2nd mortgage, and a 10% down payment. The purpose of getting
two mortgages with 80/10/10 financing as opposed to one mortgage to 90% LTV is twofold: (1) borrowers avoid private mortgage insurance (PMI) by keeping their primary mortgage under 80% LTV; (2) borrowers get a much lower payment overall. Overall payments are lower b/c borrowers have no PMI and because the 2nd mortgages are Home Equity Lines of Credit (HELOCs) with “Interest Only” payment options. Almost all major banks offer HELOCs, but only a select few offer HELOCs that fund “concurrently” with a first mortgage. If you are interested in knowing more, give me call (925) 899-7123 or send me a message.
