do 80/10/10 loans still exist?

F

firsttimebuyer_IHB

New member
i am a first time homebuyer and i can afford to put 10% down on a home of about 500k. a lot of brokers have been steering me away from FHA loans because of the high fees, but i dont have the 20% for a conventional loan. do the 80/10/10 loans still exist? is the higher interest rate on the 2nd loan worth it to avoid PMI?



sorry for the newbie-esque questions.. i'm trying to educate myself :)
 
I had question on similar line... how about 60/20/20? I can afford 20% down-payment now, and additional 20% in a year or so. I don't want uncertainty of re-finance rates a year from now when I put down additional 20, and I want to keep payment manageable on my primary mortgage. Maybe 20% as HELOC - or whatever is the max line I can get against 20% equity? 5-1 ARM?
 
[quote author="firsttimebuyer" date=1257913639]i am a first time homebuyer and i can afford to put 10% down on a home of about 500k. a lot of brokers have been steering me away from FHA loans because of the high fees, but i dont have the 20% for a conventional loan. do the 80/10/10 loans still exist? is the higher interest rate on the 2nd loan worth it to avoid PMI?



sorry for the newbie-esque questions.. i'm trying to educate myself :)</blockquote>


Yes, they are around... I see fewer and fewer of them on the title recordings I research for my down payments info, but they exist still.

You should check with <strong><a href="http://www.irvinehousingblog.com/forums/member/1939/">Soylent Green Is People</a></strong>, <strong><a href="http://www.irvinehousingblog.com/forums/member/364/">lendingmaestro</a></strong>, or your broker of choice to see what makes best financial sense for you.



-IR2
 
[quote author="patsox1975" date=1257919855]I had question on similar line... how about 60/20/20? I can afford 20% down-payment now, and additional 20% in a year or so. I don't want uncertainty of re-finance rates a year from now when I put down additional 20, and I want to keep payment manageable on my primary mortgage. Maybe 20% as HELOC - or whatever is the max line I can get against 20% equity? 5-1 ARM?</blockquote>


80/20 should be fine for you. You can prepay your debt down, without having to refinance.



For example, if your mortgage payment is $2500/month, you can send a payment for $3000 and the additional $500 can be applied towards your outstanding balance.



No need to have a second, at a higher rate, that you just want to pay off in a year anyway.



-IR2
 
I should have been more clearer. My motivation is manageable cash flow through term of the loan (although it will be tighter at the beginning). Payment due every month doesn't change if I even pay it down. Only way to lower payment is to re-finance, which I want to avoid.
 
And actually if the second loan was HELOC, I could re-pay only interest till I pay it all off in a year. And my payment would be less than if all of 80% was financed.
 
hah, i just wrote in another item that i think that they are rare now, as few lenders want to be in the second position lein.



but i anxiously await one of the lending pros chiming in.
 
There are a few credit unions that still have second TD's to 90% but other than these very few resources an 80/10/10 is not possible to obtain in SoCal. Those CU's that do this restrict their lending to parts of LA County for example and only on SFD's - no Condo's.



You could ask a seller to carry paper. A 10% 2nd TD with a 7.0% yield (a fair price in this market) is pretty tempting - if you get a seller who isn't leapfrogging into another home and needs to use all of their equity.



My .02c



Soylent Green Is People.
 
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