An 80-15-5 Program sometimes
called a Piggy-Back, is a fixed rate program designed to
help Borrower's purchase a home with as little as 5% down
while avoiding Mortgage Insurance. Not only does it save you
money, it also maximizes your tax benefits. Example:
Borrowers wish to purchase a home for $300,000 with a down
payment of $15,000.
Problem: Most Lenders will provide a first mortgage of
$285,000 with a Mortgage Insurance payment (which is not tax
deductible) of approximately $171 per month.
Solution: 80-15-5 program is two loans for the price of one.
Under this same scenario, we would issue a first mortgage of
$240,000 with a second mortgage of $45,000 and eliminate the
additional cost of Mortgage Insurance. All borrowers have a
real aversion to paying mortgage insurance. Justifiably so,
as mortgage insurance is costly and is not tax deductible.
Another great benefit is after the second is paid off,
usually (5-15 years) you are left with only one payment.
|
5%
DOWN PAYMENT |
|
$0.00 Mortgage Insurance |
|
80/15/5
involves a purchase money second
(80%
first lien, 15% second lien, 5% down) |
| Program
Comparison |
OPTION
1 |
OPTION
2 |
|
|
|
|
95%
LTV |
80/15/5
CLTV |
| Sales
Price |
$300,000 |
$300,000 |
| First
Mortgage |
$285,000 |
$240,000 |
| Second
Mortgage |
N/A |
$45,000 |
| Monthly
Mortgage Ins. |
$171.00 |
-0- |
| P:I
Payment 1st |
$1708.72 |
$1438.92 |
| P:I
Payment 2nd |
N/A |
$417.16 |
| Monthly
Payment |
$1879.72 |
$1856.08 |
| Payment
After 15 Years |
$1708.72 |
$1438.92 |
|
|
|
|
*Taxes
and insurance not included in payment calculations* |
Benefits to Borrower:
Enhanced tax benefits,
interest on 2nd is 100% tax deductible, mortgage insurance
is not.
- Allows
for expanded ratios.
- Faster
Equity
- Fewer
closing costs!
- Allows
borrowers to waive escrows.
- No
pre-payment penalty on 1st or 2nd lien.
HOW CAN YOU GET QUALIFIED?
1) Click
here to fill out a Good Faith Estimate.
Now we may get you approved
and give you a detailed estimate showing the interest rate
offered, the loan amount, the estimated monthly payment, all
of the costs of the loan and what they are for, and how much
money you will need to close.
2) If you like the estimate, we
will issue you an APPROVAL LETTER and you can go house
shopping!
|
