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80/20 Loan

Mortgage Library: Ask a Mortgage Related Question: Answers: 80/20 Loan


What exactly is a 80/20 loan for a mortgage on a house?

V. J.


An 80/20 loan is a combination loan for 100% financing (no down payment). With this type of mortgage, you would actually have two loans -- one for 80% of the purchase price and one for 20% of the purchase price. Sometimes payments on both loans are made to the same lender, sometimes different lenders.

Some of the benefits of an 80/20 loan: you avoid private mortgage insurance; you have more tax-deductible interest at the end of the year; the blended rate is often lower than the interest rate for a single 100% loan; some non-conventional lenders only offer 80/20 loans for 100% financing.

Please call or email if I can be of further assistance!

Rick Lanicek
Mercantile Mortgage Corp
17950 Preston Rd Ste 50
Dallas, TX 75252-5657
(972) 705-9721
(800) 256-0817 Ext 202
Mobile (214) 552-6125
eFax (972) 692-7260

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