WandaFearsBlog: Save the Cost of Mortgage Insurance

Save the Cost of Mortgage Insurance

Save the Cost of Mortgage Insurance

 

 

                                                                           

 

During the banking crisis in the Great Recession, certain types of mortgages were unavailable that are once again being offered. Fortunately, the 80-10-10 mortgage is one of those making a reappearance and it can save borrowers a considerable amount of money.

80-10-10.png The objective of an 80-10-10 mortgage is to avoid the expense of mortgage insurance for buyers wanting a 90% loan. A buyer can obtain an 80% first mortgage and a 10% second mortgage with a 10% down payment and not be required to have private mortgage insurance.

For example, a buyer could put $30,000 down on a home priced at $300,000 and get an 80% first mortgage without mortgage insurance. The borrower could get a second mortgage, either through the same lender or a third party.

In the example, the 80-10-10 would save a buyer $193.71 per month which can be a considerable amount of money over a ten-year period. The interest rate on the second loan will be higher than the first because there is more risk.

Helping buyers make better choices is a valuable service real estate professionals can provide. Having the right tools and information can make the decisions easier to understand. Using an 80-10-10 calculator, you can see what the savings might be for your situation.

WandaFears, Realtor ABR CRS GRI WCR

Richmond, Va. Long and Foster Realtors

www.wandafears.com
wanda@wandafears.com


804-909-2777

www.facebook.com/wandafears

Comment balloon 1 commentWanda Fears • March 27 2017 01:37PM

Comments

PMI is just money down the drain. If there is any way to avoid it, as you detail above, that's a great benefit to our clients.

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) over 1 year ago

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