topic Re: Question about 80 20 mortgage in Mortgage Loans

Question about 80 20 mortgage

Anonymous — Thu, 01 Nov 2007 22:38:22 GMT

My daughter and son-in-law are getting ready to put a contract on a new house. They have been having some preliminary conversations with a lender about financing this new home. I'm trying to help them get all the facts together so they can make the best decision on the loan so let me explain my question...

Right now, on the internet the house is listed at $239,000 but when my daughter went to the house the flier on the counter said $229,000. The builder has agreed to honor the $229,000. So that's good. Now the realtor they have been talking to is suggesting that they offer $219,000 for the house because of the slow housing market. This is where my question comes in... when they talk to the lender about possibly doing the 80/20 loan, is the 80% calculated on the loan amount or do you calculate the 80% on what the listed selling price is for the house?

Thanks for your help,

Brenda

Re: Question about 80 20 mortgage

ShanetheMortgageMan — Thu, 01 Nov 2007 23:05:24 GMT

On a purchase the lower of the agreed upon sales price or appraised value is used to determine things... so on a $219k sales price, an 80/20 would be a $175,200 1st with a $43,800 2nd, also, keep in mind a lot of lenders are no longer doing 80/20's and instead just do 1 loan at 100% LTV.

Re: Question about 80 20 mortgage

Anonymous — Thu, 01 Nov 2007 23:33:22 GMT

Also, if the appraised value is less than the sales price - the buyer can ask the seller to lower it; HOWEVER, the seller is not required to lower it unless that is already written into the cntract. If there isn't language covering this in the contract it can "get interesting" with the seller saying pay the contract price. The realtor needs to go over the contract with her paragraph by paragraph.

Re: Question about 80 20 mortgage

Anonymous — Fri, 02 Nov 2007 07:05:17 GMT

Hello bvquilts,

The 80-20 mortgage is based on a combination of two loans - one against 80% of your property value and the other against 20% of the value. By the word "value", I mean the appraised value of the property. This value is to be determined by the appraiser appointed usually by the lender.