Mortgage 80 20 Loan Basics

Are you in the market for a new home but don’t have the 20% down payment that is mandatory by many mortgage lenders today? If so, a mortgage 80 20 could be your answer to a new home loan.

With the difficult financial environment today, it is often hard for people to save enough cash to come up with the 20% needed for the home they want. In many parts of the country the housing costs are so high that it seems almost impossible for a middle class income family to even get into the housing market with a traditional mortgage. Many of you in this position, could benefit from a mortgage 80 20 loan to come up the with the 100% total financing that you need.

Mortgage 80 20 Loan – What is it?

Essentially, a mortgage 80 20 loan consists of two separate loans. The first loan is considered your primary mortgage and its amount represents 80% of the appraised value of your home. The second loan is considered your secondary mortgage and represents the additional 20% of the appraised value of your home not covered under the primary mortgage.

With a mortgage 80 20 loan, you can circumvent making payment of Private Mortgage Insurance, saving hundreds of dollars monthly. Additionally, there are lenders who will provide 103% of the appraised value of your home, allowing you to finance closing fees and pay less out of pocket at the closing of your new home.

Getting a Mortgage 80 20 Loan

The best way to find a mortgage 80 20 loan is through a mortgage broker who specializes in unconventional loans. These types of brokers have access to all sorts of specialized programs that can help you get into the home of your choosing. You need to find a dependable and qualified broker who puts your needs first and does not overcharge you for your loan. Do not be afraid to ask for references and qualifications when choosing the broker you intend to represent you. The Internet is a good place to search for mortgage brokers since all reputable brokers now have a web presence.