I bought my first house ~7 years ago with a 80/15/5 loan (80% first mortgage, 15% second mortgage, 5% down).
Do these loans still exist in todays climate? I am looking to purchase a new home and would be interested in a 80/10/10 loan or something similar (80/5/15 etc).
Thanks in advance for any help.
Thanks Dallas. My wife and my scores should not pose any problem, nor should reserves.
Can I get your take on these types of loans? I like the idea of them because I have heard that it can be difficult to have PMI removed from a mortgage. I also like that I can pay down/off the second loan at an accelerated pace basically lowering my monthly payments in the future.
Thanks again for your help!
Hi watchmann, you make a good point--and when we get to the point of putting an offer on a house we will seriously look wether we can reach 20% down without too much pain. Keep in mind that reserves considers things like retirement savings etc that we have no interest in touching until we retire. Also, we have a number of investments that we would rather not liquidate at this moment--although we certainly could in order to get to 20% down. I think it all comes down to comfort. I would rather pay a bit of extra $$ for a second mortgage than to liquidate most of our savings.
Having 6 months of reserves is not hard terribly difficult. Converting those reserves to $$ is not always easy or desirable.