Eliminate Private Mortgage Insurance With 80/10/10
Any conventional mortgage loan with less than 20% down payment, or equity in the home, requires mandatory private mortgage insurance. However, if you have at least a 10% down payment you can put down towards your home purchase, and you want to eliminate paying for private mortgage insurance, also known as PMI, I have the perfect solution for you as a mortgage loan borrower. It is called the 80/10/10 conventional mortgage loan program.
The Mechanics Of The 80/10/10 Mortgage Loan Program
If you have at least a 10% down payment and want to avoid paying a monthly private mortgage insurance premium, you need to get a first mortgage of 80% Loan to Value, LTV, and a second mortgage loan or a Home Equity Line of Credit, also known as HELOC, of 10% so your total CLTV is at 90% loan to value, LTV. These mortgage loan programs are also known as 80/10/10 where the first mortgage loan is 80%, second mortgage loan or HELOC is 10%, and your down payment towards your new home purchase is 10%.
Advantages Of 80/10/10 Mortgage Loan Programs
As discussed earlier, private mortgage insurance is mandatory on all conventional mortgage loans with less than 20% down payment. Minimum conventional mortgage loan down payment requirements are mandated by Fannie Mae at 5% down payment with private mortgage insurance. Private mortgage insurance is similar to FHA mortgage insurance premium but it is normally half the cost. In the event you had a 10% down payment , you will be required to pay private mortgage insurance. With entering into a 80/10/10 conventional mortgage loan program, you will not have to pay private mortgage insurance due to the fact that your first mortgage is at a 80% Loan to Value, LTV. You, as the mortgage loan borrower, will need permission from your first mortgage lender and in some cases this might not be allowed or the first mortgage lender might charge you a slightly higher mortgage rate. Depending on the mortgage rate increase, maybe paying private mortgage insurance might be a better program for you as a mortgage loan borrower. Please contact me if you are seeking a conventional mortgage loan at 262-716-8151 or visit me at www.gustancho.com and we can discuss which conventional mortgage loan program is best suited for you depending on your credit and financial profile.