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80/20 Loan
This combination loan uses an 80% first mortgage and a
20% second, and requires no mortgage insurance. It allows for higher debt ratios
and there are no income limitations.
This is a great loan for someone that
makes too much money for first-time homebuyer programs, but still
needs a no down payment loan. In a purchase transaction, a second
trust is frequently used in combination with a first trust to avoid
paying Private Mortgage Insurance or PMI. The first trust is always
set at 80% of your purchase price which eliminates the need for PMI.
We add a second trust of 20% of the purchase price or
value.
Advantages:
- Your entire payment is tax deductible (mortgage
insurance is not)
- You may decide to pay off your second early
reducing your total payment.
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