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80-10-10 Mortgage
An 80-10-10 mortgage is a type of loan that allows borrowers to finance 80% of the purchase price of a home with a conventional mortgage, 10% with a second mortgage, and 10% with a down payment. This type of loan can be helpful for borrowers who do not have enough money for a down payment or who have bad credit.
What is 80-10-10 Mortgage?
Here is a more detailed explanation of how an 80-10-10 mortgage works:
- The first 80% of the purchase price is financed with a conventional mortgage. The interest rate on a conventional mortgage is usually lower than the interest rate on a second mortgage.
- The second 10% of the purchase price is financed with a second mortgage. The interest rate on a second mortgage is usually higher than the interest rate on a conventional mortgage.
- The final 10% of the purchase price is the down payment. The down payment is the amount of money that the borrower puts down towards the purchase of the home.
There are a few things to keep in mind when considering an 80-10-10 mortgage:
- The down payment is usually required to be at least 10% of the purchase price. However, some lenders may allow for a lower down payment.
- The interest rate on the second mortgage is usually higher than the interest rate on the conventional mortgage.
- The monthly payments on an 80-10-10 mortgage will be higher than the monthly payments on a conventional mortgage.
If you are considering an 80-10-10 mortgage, it is important to speak to a qualified mortgage lender to discuss your options.