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80 20 Mortgages
You may have heard an 80/20 mortgage loan referred to as a piggyback loan. Borrowers
take out a first mortgage for 80 percent of the total loan and a second mortgage for
the other 20 percent. In this way, they are financing 100 percent of the cost of their
properties.
Borrowing this way has two distinct advantages. One is that you can avoid paying private
mortgage insurance (PMI), which is required if a loan totals more than 80 percent
of your home's value. By avoiding PMI, you could possibly save as much as $100 per
month.
The other advantage is that you might be able to save money on your taxes, depending
on your tax bracket and the type of loan your second mortgage is. Your second mortgage
may be a home equity loan with a fixed rate payment plan, a standard fixed rate mortgage,
or a home equity line of credit.
Why Would You Use an 80/20 Mortgage?
The total advantage of using an 80/20 loan depends on several factors, like the rates
of the two loans, the terms, and the closing costs. Many people who haven't been able
to save up for a down payment take advantage of the savings an 80/20 loan gives them.
Let American Mortgage Specialists help you determine whether an 80/20 loan is right
for your property. Our professional advisors can help you find the best mortgage loan
to fit your needs. We offer competitive low rates, quick closing, and superior service.
For more information, call us today at 1-866-385-5450 or email info@amsaz.com.
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